UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March 31,~~September 30, 2020


☐			Transition Report pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

for the transition period from to

Commission File No. 0-22818

___________________________________________

THE HAIN CELESTIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

___________________________________________


Delaware						22-3240619
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

1111 Marcus Avenue, Lake Success, NY 11042

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 587-5000

Former name, former address and former fiscal year, if changed since last report: N/A

___________________________________________

Table of Contents

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HAIN	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ý

As of ~~April 30,~~November 2, 2020, there were ~~101,954,182~~100,637,458 shares outstanding of the registrant’s Common Stock, par value $.01 per share.

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THE HAIN CELESTIAL GROUP, INC.

Index


	Part I - Financial Information	Page

Item 1.	Financial Statements
	Consolidated Balance Sheets - ~~March~~ September ~~31, 20~~ 3 200 , 2020 and June 30, ~~2019~~20 20	3
	Consolidated Statements of Operations - Three ~~and~~ ~~nine~~months ended ~~March~~Se ptember ~~31, 20~~3 200 , 2020 and ~~201~~92019	4
	Consolidated Statements of Comprehensive Income (Loss ) - Three ~~and~~ ~~nine~~months ended ~~March~~September ~~31, 20~~3 200 , 2020 and ~~201~~92019	5
	Consolidated Statement of Stockholders’ Equity - Three ~~and~~ ~~nine~~m ~~months~~onths ended ~~March~~September ~~31, 20~~3 200 , 2020 and ~~201~~92019	6
	Consolidated Statements of Cash Flows - ~~Nine~~Three months ended ~~March~~September ~~31, 20~~3 200 , 2020 and ~~201~~92019	8
	Notes to Consolidated Financial Statements	910
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3036
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48

	Part II - Other Information

Items 3, 4 and 5 are not applicable
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	5249
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5249

Item 6.	Exhibits	5350
Signatures		5451

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Cautionary Note Regarding Forward Looking Information

This Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2020 (the “Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts and projections about future events only as of the date of this Quarterly Report on Form 10-Q, and are not statements of historical fact. We make such forward-looking statements pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

Many of our forward-looking statements include discussions of trends and anticipated developments under the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Quarterly Report on Form 10-Q. In some cases, you can identify forward-looking statements by terminology such as the use of “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” and similar expressions, or the negative of those expressions. These forward-looking statements include, among other things, our beliefs or expectations relating to our business strategy, growth strategy, market price, brand portfolio and product performance, the seasonality of our business and our results of operations and financial condition. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to further update any such statement to reflect new information, the occurrence of future events or circumstances or otherwise.

The forward-looking statements in this filing do not constitute guarantees or promises of future performance. Factors that could cause or contribute to such differences may include, but are not limited to, challenges and uncertainty resulting from the COVID-19 pandemic, the impact of competitive products and changes to the competitive environment, changes to consumer preferences, general economic and financial market conditions, the United Kingdom's exit from the European Union, consolidation of customers or the loss of a significant customer, reliance on independent distributors, ~~general economic and financial market conditions,~~ risks associated with our international sales and operations, our ability to manage our supply chain effectively, volatility in the cost of commodities, ingredients, freight and fuel, our ability to ~~execute and realize~~implement cost savings initiatives, ~~including stock-keeping unit (“SKU”) rationalization plans,~~ the impact of our debt ~~and our credit agreements on our financial condition and our business,~~covenants, the potential discontinuation of LIBOR, our ability to manage our financial reporting and internal control system processes, potential liabilities due to legal claims, government investigations and other regulatory enforcement actions, costs incurred due to pending and future litigation, potential liability, including in connection with indemnification obligations to our ~~current and~~ former officers and members of our Board of Directors that may not be covered by insurance, potential liability if our products cause illness or physical harm, impairments in the carrying value of goodwill or other intangible assets, our ability to consummate divestitures, ~~our ability to integrate past acquisitions,~~ the availability of organic ingredients, disruption of operations at our manufacturing facilities, loss of one or more independent co-packers, disruption of our transportation systems, risks relating to the protection of intellectual property, the risk of liabilities and claims with respect to environmental matters, the reputation of our brands, our reliance on independent certification for a number of our products and other risks described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019~~2020 under the heading “Risk Factors”~~, as supplemented by Part II, Item 1A of this Quarterly Report on Form 10-Q under the heading "Risk Factors"~~, and Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in other reports that we file in the future.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

~~MARCH 31,~~SEPTEMBER 30, 2020 AND JUNE 30, ~~2019~~2020

(In thousands, except par values)


		March 31,		June 30,			September 30,		June 30,
		2020		2019			2020		2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	41,549	$	31,017	Cash and cash equivalents	$	27,523	$	37,771
Accounts receivable, less allowance for doubtful accounts of $851 and $588, respectively		237,719		209,990
Accounts receivable, less allowance for doubtful accounts of $1,189 and $638, respectively						Accounts receivable, less allowance for doubtful accounts of $1,189 and $638, respectively	166,086		170,969
Inventories	Inventories	238,133		299,341		Inventories	292,968		248,170
Prepaid expenses and other current assets	Prepaid expenses and other current assets	86,653		51,391		Prepaid expenses and other current assets	55,151		95,690
Current assets of discontinued operations		—		110,048
Assets held for sale						Assets held for sale	71,023		8,334
Total current assets	Total current assets	604,054		701,787		Total current assets	612,751		560,934
Property, plant and equipment, net	Property, plant and equipment, net	287,629		287,845		Property, plant and equipment, net	275,708		289,256
Goodwill	Goodwill	861,067		875,881		Goodwill	860,347		861,958
Trademarks and other intangible assets, net	Trademarks and other intangible assets, net	355,714		380,286		Trademarks and other intangible assets, net	319,760		346,462
Investments and joint ventures	Investments and joint ventures	18,103		18,890		Investments and joint ventures	17,899		17,439
Operating lease right-of-use assets	Operating lease right-of-use assets	81,959		—		Operating lease right-of-use assets	89,397		88,165
Other assets	Other assets	27,611		58,764		Other assets	23,872		24,238
Noncurrent assets of discontinued operations		—		259,167

Total assets	Total assets	$	2,236,137	$	2,582,620	Total assets	$	2,199,734	$	2,188,452
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	181,783	$	219,957	Accounts payable	$	184,997	$	171,009
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	118,405		114,265		Accrued expenses and other current liabilities	117,352		124,045
Current portion of long-term debt	Current portion of long-term debt	2,041		17,232		Current portion of long-term debt	445		1,656

Current liabilities of discontinued operations		—		31,703
Liabilities related to assets held for sale						Liabilities related to assets held for sale	26,209		3,567
Total current liabilities	Total current liabilities	302,229		383,157		Total current liabilities	329,003		300,277
Long-term debt, less current portion	Long-term debt, less current portion	363,526		613,537		Long-term debt, less current portion	289,042		281,118
Deferred income taxes	Deferred income taxes	40,136		34,757		Deferred income taxes	30,985		51,849
Operating lease liabilities, noncurrent portion	Operating lease liabilities, noncurrent portion	74,937		—		Operating lease liabilities, noncurrent portion	82,962		82,962
Other noncurrent liabilities	Other noncurrent liabilities	16,261		14,489		Other noncurrent liabilities	31,161		28,692
Noncurrent liabilities of discontinued operations		—		17,361

Total liabilities	Total liabilities	797,089		1,063,301		Total liabilities	763,153		744,898
Commitments and contingencies (Note 16)
Commitments and contingencies (Note 17)						Commitments and contingencies (Note 17)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: NaN	Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: NaN	—		—		Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: NaN	0		0
Common stock - $.01 par value, authorized 150,000 shares; issued: 109,089 and 108,833 shares, respectively; outstanding:101,972 and 104,219 shares, respectively		1,092		1,088
Common stock - $.01 par value, authorized 150,000 shares; issued: 109,177 and 109,123 shares, respectively; outstanding:100,638 and 101,885 shares, respectively						Common stock - $.01 par value, authorized 150,000 shares; issued: 109,177 and 109,123 shares, respectively; outstanding:100,638 and 101,885 shares, respectively	1,093		1,092
Additional paid-in capital	Additional paid-in capital	1,168,378		1,158,257		Additional paid-in capital	1,176,241		1,171,875
Retained earnings	Retained earnings	610,932		695,017		Retained earnings	614,346		614,171
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(172,403)		(225,004)		Accumulated other comprehensive loss	(140,387)		(171,392)
		1,607,999		1,629,358			1,651,293		1,615,746
Less: Treasury stock, at cost, 7,117 and 4,614 shares, respectively		(168,951)		(110,039)
Less: Treasury stock, at cost, 8,539 and 7,238 shares, respectively						Less: Treasury stock, at cost, 8,539 and 7,238 shares, respectively	(214,712)		(172,192)
Total stockholders’ equity	Total stockholders’ equity	1,439,048		1,519,319		Total stockholders’ equity	1,436,581		1,443,554
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,236,137	$	2,582,620	Total liabilities and stockholders’ equity	$	2,199,734	$	2,188,452

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2020 AND 2019

(In thousands, except per share amounts)

Three Months Ended March 31, Nine Months Ended March 31,
2020 2019 2020 2019
Net sales $ 553,297 $ 547,257 $ 1,542,157 $ 1,599,301
Cost of sales 420,902 434,049 1,206,324 1,295,834
Gross profit 132,395 113,208 335,833 303,467
Selling, general and administrative expenses 85,447 81,088 245,205 235,561
Amortization of acquired intangibles 3,174 3,265 9,446 9,946
Productivity and transformation costs 11,514 9,408 37,949 29,613
Chief Executive Officer Succession Plan expense, net — 455 — 30,156
Proceeds from insurance claim (400) — (2,962) —
Accounting review and remediation costs, net of insurance proceeds — — — 4,334
Long-lived asset and intangibles impairment 13,525 — 15,414 23,709
Operating income (loss) 19,135 18,992 30,781 (29,852)
Interest and other financing expense, net 4,037 5,994 15,068 15,736
Other (income) expense, net (260) 1,067 2,312 2,038
Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees 15,358 11,931 13,401 (47,626)
(Benefit) provision for income taxes (10,242) 2,943 (9,753) (1,926)
Equity in net loss of equity-method investees 564 205 1,219 391
Net income (loss) from continuing operations $ 25,036 $ 8,783 $ 21,935 $ (46,091)
Net loss from discontinued operations, net of tax (697) (74,620) (105,581) (123,672)
Net income (loss) $ 24,339 $ (65,837) $ (83,646) $ (169,763)
Net income (loss) per common share⁽¹⁾:
Basic net income (loss) per common share from continuing operations $ 0.24 $ 0.08 $ 0.21 $ (0.44)
Basic net loss per common share from discontinued operations (0.01) (0.72) (1.01) (1.19)
Basic net income (loss) per common share $ 0.23 $ (0.63) $ (0.80) $ (1.63)
Diluted net income (loss) per common share from continuing operations $ 0.24 $ 0.08 $ 0.21 $ (0.44)
Diluted net loss per common share from discontinued operations (0.01) (0.72) (1.01) (1.19)
Diluted net income (loss) per common share $ 0.23 $ (0.63) $ (0.80) $ (1.63)
Shares used in the calculation of net income (loss) per common share:
Basic 104,032 104,117 104,192 104,045
Diluted 104,337 104,334 104,489 104,045


	Three Months Ended September 30,
	2020		2019
Net sales	$	498,627	$	482,076
Cost of sales	379,463		384,245
Gross profit	119,164		97,831
Selling, general and administrative expenses	79,152		80,680
Amortization of acquired intangible assets	2,433		3,083
Productivity and transformation costs	1,802		14,175

Proceeds from insurance claim	0		(2,562)


Long-lived asset impairment	32,497		0
Operating income	3,280		2,455
Interest and other financing expense, net	2,453		6,294
Other (income) expense, net	(1,373)		1,328
Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees	2,200		(5,167)
Provision (benefit) for income taxes	12,962		(531)
Equity in net loss of equity-method investees	19		317
Net loss from continuing operations	$	(10,781)	$	(4,953)
Net income (loss) from discontinued operations, net of tax	11,266		(102,068)
Net income (loss)	$	485	$	(107,021)

Net (loss) income per common share:
Basic net loss per common share from continuing operations	$	(0.11)	$	(0.05)
Basic net income (loss) per common share from discontinued operations	0.11		(0.98)
Basic net loss per common share	$	0	$	(1.03)

Diluted net loss per common share from continuing operations	$	(0.11)	$	(0.05)
Diluted net income (loss) per common share from discontinued operations	0.11		(0.98)
Diluted net loss per common share	$	0	$	(1.03)

Shares used in the calculation of net (loss) income per common share:
Basic	101,558		104,225
Diluted	101,558		104,225

⁽¹⁾~~Net income (loss) per common share may not add in certain periods due to rounding.~~

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (~~LOSS~~LOSS) (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2020 AND 2019

(In thousands)


		Three Months Ended																							Three Months Ended
		March 31, 2020										March 31, 2019											September 30, 2020				September 30, 2019
		Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount			Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net income (loss)	Net income (loss)					$	24,339					$	(65,837)	Net income (loss)					$	485					$	(107,021)

Other comprehensive (loss) income:
Other comprehensive income (loss):														Other comprehensive income (loss):
Foreign currency translation adjustments before reclassifications	Foreign currency translation adjustments before reclassifications	$	(52,315)	$	—	(52,315)		$	20,934	$	—	20,934		Foreign currency translation adjustments before reclassifications	$	33,957	$	0	$	33,957	$	(38,942)	$	0	$	(38,942)
Reclassification of currency translation adjustment included in Net loss from discontinued operations, net of tax														Reclassification of currency translation adjustment included in Net loss from discontinued operations, net of tax	0		0		0		95,120		0		95,120
Change in deferred gains (losses) on cash flow hedging instruments														Change in deferred gains (losses) on cash flow hedging instruments	50		(10)		40		(78)		10		(68)
Change in deferred gains (losses) on net investment hedging instruments														Change in deferred gains (losses) on net investment hedging instruments	(3,787)		795		(2,992)		0		0		0

Change in deferred gains (losses) on cash flow hedging instruments		134		(25)		109		(52)		10		(42)
Total other comprehensive income														Total other comprehensive income	$	30,220	$	785	$	31,005	$	56,100	$	10	$	56,110

Total other comprehensive (loss) income		$	(52,181)	$	(25)	$	(52,206)	$	20,882	$	10	$	20,892

Total comprehensive loss						$	(27,867)					$	(44,945)
Total comprehensive income (loss)														Total comprehensive income (loss)					$	31,490					$	(50,911)

		Nine Months Ended
		March 31, 2020										March 31, 2019
		Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net loss						$	(83,646)					$	(169,763)

Other comprehensive income (loss):
Foreign currency translation adjustments before reclassifications		$	(42,602)	$	—	(42,602)		$	(20,533)	$	—	(20,533)
Reclassification of currency translation adjustment included in Net loss from discontinued operations, net of tax		95,120		—		95,120		—		—		—
Change in deferred gains (losses) on cash flow hedging instruments		108		(25)		83		(52)		10		(42)

Total other comprehensive income (loss)		$	52,626	$	(25)	$	52,601	$	(20,585)	$	10	$	(20,575)

Total comprehensive loss						$	(31,045)					$	(190,338)

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2020

(In thousands, except par values)


		Common Stock					Additional							Accumulated Other				Common Stock				Additional							Accumulated Other
			Amount		Paid-in		Retained		Treasury Stock					Comprehensive						Amount		Paid-in		Retained	Treasury Stock				Comprehensive
		Shares	at $.01		Capital		Earnings		Shares	Amount		(Loss) Income		Total			Shares	at $.01		Capital		Earnings		Shares	Amount		(Loss) Income		Total
Balance at June 30, 2019		108,833	$	1,088	$	1,158,257	$	695,017	4,614	$	(110,039)	$	(225,004)	$	1,519,319
Net loss							(107,021)							(107,021)
Cumulative effect of adoption of ASU 2016-02							(439)							(439)
Balance at June 30, 2020																Balance at June 30, 2020	109,123	$	1,092	$	1,171,875	$	614,171	7,238	$	(172,192)	$	(171,392)	$	1,443,554
Net income																Net income						485							485
Cumulative effect of adoption of ASU 2016-13																Cumulative effect of adoption of ASU 2016-13						(310)							(310)
Other comprehensive income	Other comprehensive income											56,110		56,110		Other comprehensive income											31,005		31,005
Issuance of common stock pursuant to stock-based compensation plans		40	1		(1)									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans									17	(312)				(312)
Stock-based compensation expense					3,281									3,281
Balance at September 30, 2019		108,873	$	1,089	$	1,161,537	$	587,557	4,631	$	(110,351)	$	(168,894)	$	1,470,938
Net loss							(964)							(964)

Other comprehensive income												48,697		48,697
Issuance of common stock pursuant to stock-based compensation plans		146	2		(2)									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans									27	(671)				(671)
Stock-based compensation expense					3,083									3,083
Balance at December 31, 2019		109,019	$	1,091	$	1,164,618	$	586,593	4,658	$	(111,022)	$	(120,197)	$	1,521,083
Net income							24,339							24,339
Cumulative effect of adoption of ASU 2016-02							—							—
Other comprehensive loss												(52,206)		(52,206)
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	70	1		(1)									—		Issuance of common stock pursuant to stock-based compensation plans	54	1		(1)									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans	Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans								20	(523)				(523)		Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans								20	(468)				(468)
Repurchases of common stock	Repurchases of common stock								2,439	(57,406)						Repurchases of common stock								1,281	(42,052)				(42,052)
Stock-based compensation expense	Stock-based compensation expense				3,761									3,761		Stock-based compensation expense				4,367									4,367
Balance at March 31, 2020		109,089	$	1,092	$	1,168,378	$	610,932	7,117	$	(168,951)	$	(172,403)	$	1,439,048
Balance at September 30, 2020																Balance at September 30, 2020	109,177	$	1,093	$	1,176,241	$	614,346	8,539	$	(214,712)	$	(140,387)	$	1,436,581

See notes to consolidated financial statements.

Table of Contents

THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2019

(In thousands, except par values)


		Common Stock					Additional							Accumulated Other				Common Stock				Additional							Accumulated Other
			Amount		Paid-in		Retained		Treasury Stock					Comprehensive						Amount		Paid-in		Retained	Treasury Stock				Comprehensive
		Shares	at $.01		Capital		Earnings		Shares	Amount		(Loss) Income		Total			Shares	at $.01		Capital		Earnings		Shares	Amount		(Loss) Income		Total
Balance at June 30, 2018		108,422	$	1,084	$	1,148,196	$	878,516	4,470	$	(106,507)	$	(184,240)	$	1,737,049
Balance at June 30, 2019																Balance at June 30, 2019	108,833	$	1,088	$	1,158,257	$	695,017	4,614	$	(110,039)	$	(225,004)	$	1,519,319
Net loss	Net loss						(37,425)							(37,425)		Net loss						(107,021)							(107,021)
Cumulative effect of adoption of ASU 2016-01							(348)					348		—
Cumulative effect of adoption of ASU 2014-09							163							163
Other comprehensive loss												(13,519)		(13,519)
Cumulative effect of adoption of ASU 2016-02																Cumulative effect of adoption of ASU 2016-02						(439)							(439)

Other comprehensive income																Other comprehensive income											56,110		56,110
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	85	1		(1)									—		Issuance of common stock pursuant to stock-based compensation plans	40	1		(1)									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans	Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans								35	(979)				(979)		Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans								17	(312)				(312)
Stock-based compensation expense	Stock-based compensation expense				135									135		Stock-based compensation expense				3,281									3,281
Balance at September 30, 2018		108,507	$	1,085	$	1,148,330	$	840,906	4,505	$	(107,486)	$	(197,411)	$	1,685,424
Net loss							(66,501)							(66,501)

Other comprehensive loss												(27,948)		(27,948)
Issuance of common stock pursuant to stock-based compensation plans		184	2		(2)									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans									79	(1,943)				(1,943)
Stock-based compensation expense					1,911									1,911
Balance at December 31, 2018		108,691	$	1,087	$	1,150,239	$	774,405	4,584	$	(109,429)	$	(225,359)	$	1,590,943
Net loss							(65,837)							(65,837)

Other comprehensive income												20,892		20,892
Issuance of common stock pursuant to stock-based compensation plans		22	—		—									—

Shares withheld for payment of employee payroll taxes due on shares issued under stock-based compensation plans									8	(149)				(149)
Stock-based compensation expense					3,943									3,943
Balance at March 31, 2019		108,713	$	1,087	$	1,154,182	$	708,568	4,592	$	(109,578)	$	(204,467)	$	1,549,792
Balance at September 30, 2019																Balance at September 30, 2019	108,873	$	1,089	$	1,161,537	$	587,557	4,631	$	(110,351)	$	(168,894)	$	1,470,938

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH 31,~~ SEPTEMBER 30, 2020 AND 2019

(In thousands)


		Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019			2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(83,646)	$	(169,763)
Net loss from discontinued operations		(105,581)		(123,672)
Net income (loss) from continuing operations		21,935		(46,091)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:
Net income (loss)						Net income (loss)	$	485	$	(107,021)
Net income (loss) from discontinued operations						Net income (loss) from discontinued operations	11,266		(102,068)
Net loss from continuing operations						Net loss from continuing operations	(10,781)		(4,953)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities from continuing operations:						Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities from continuing operations:
Depreciation and amortization	Depreciation and amortization	40,069		37,548		Depreciation and amortization	13,761		13,923
Deferred income taxes	Deferred income taxes	(9,035)		(24,524)		Deferred income taxes	(930)		(4,404)
Chief Executive Officer Succession Plan expense, net		—		29,727

Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	1,219		391		Equity in net loss of equity-method investees	19		317
Stock-based compensation, net	Stock-based compensation, net	9,581		5,918		Stock-based compensation, net	4,367		2,737

Long-lived asset and intangibles impairment		15,414		23,709
Long-lived asset impairment						Long-lived asset impairment	32,497		0
Other non-cash items, net	Other non-cash items, net	2,335		3,697		Other non-cash items, net	(1,667)		1,764
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
(Decrease) increase in cash attributable to changes in operating assets and liabilities:						(Decrease) increase in cash attributable to changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(30,870)		(4,466)		Accounts receivable	(3,575)		(853)
Inventories	Inventories	47,280		11,630		Inventories	(44,962)		(5,507)
Other current assets	Other current assets	10,302		(223)		Other current assets	37,869		14,223
Other assets and liabilities	Other assets and liabilities	(1,166)		5,206		Other assets and liabilities	(1,541)		144
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(42,972)		(24,191)		Accounts payable and accrued expenses	15,612		(20,972)
Net cash provided by operating activities - continuing operations		64,092		18,331
Net cash provided by (used in) operating activities from continuing operations						Net cash provided by (used in) operating activities from continuing operations	40,669		(3,581)
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(46,961)		(55,073)
Purchases of property, plant and equipment						Purchases of property, plant and equipment	(12,155)		(13,164)

Proceeds from sale of businesses and other	Proceeds from sale of businesses and other	14,428		3,863		Proceeds from sale of businesses and other	4,427		0
Net cash used in investing activities - continuing operations		(32,533)		(51,210)
Net cash used in investing activities from continuing operations						Net cash used in investing activities from continuing operations	(7,728)		(13,164)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under bank revolving credit facility	Borrowings under bank revolving credit facility	197,000		240,000		Borrowings under bank revolving credit facility	55,000		80,000
Repayments under bank revolving credit facility	Repayments under bank revolving credit facility	(254,500)		(186,791)		Repayments under bank revolving credit facility	(47,000)		(178,500)

Repayments under term loan	Repayments under term loan	(206,250)		(11,250)		Repayments under term loan	0		(206,250)
Proceeds from (funding of) discontinued operations entities		305,247		(33,815)
Repayments of other debt, net		(1,502)		(1,689)
Proceeds from discontinued operations entities						Proceeds from discontinued operations entities	0		312,195
(Repayments) borrowings of other debt, net						(Repayments) borrowings of other debt, net	(1,439)		9
Share repurchases	Share repurchases	(57,406)		—		Share repurchases	(42,052)		0
Shares withheld for payment of employee payroll taxes	Shares withheld for payment of employee payroll taxes	(1,506)		(3,071)		Shares withheld for payment of employee payroll taxes	(468)		(312)
Net cash (used in) provided by financing activities - continuing operations		(18,917)		3,384
Effect of exchange rate changes on cash - continuing operations		(2,110)		(774)
Net cash (used in) provided by financing activities from continuing operations						Net cash (used in) provided by financing activities from continuing operations	(35,959)		7,142
Effect of exchange rate changes on cash from continuing operations						Effect of exchange rate changes on cash from continuing operations	2,500		(892)
CASH FLOWS FROM DISCONTINUED OPERATIONS	CASH FLOWS FROM DISCONTINUED OPERATIONS					CASH FLOWS FROM DISCONTINUED OPERATIONS
Cash used in operating activities	Cash used in operating activities	(6,146)		(13,627)		Cash used in operating activities	0		(8,026)
Cash provided by (used in) investing activities		297,592		(33,561)
Cash (used in) provided by financing activities		(299,418)		30,582
Effect of exchange rate changes on cash - discontinued operations		(537)		(451)
Cash provided by investing activities						Cash provided by investing activities	0		306,420
Cash used in financing activities						Cash used in financing activities	0		(306,366)
Effect of exchange rate changes on cash from discontinued operations						Effect of exchange rate changes on cash from discontinued operations	0		(537)
Net cash flows used in discontinued operations	Net cash flows used in discontinued operations	(8,509)		(17,057)		Net cash flows used in discontinued operations	0		(8,509)
Net increase (decrease) in cash and cash equivalents and restricted cash		2,023		(47,326)
Net decrease in cash and cash equivalents						Net decrease in cash and cash equivalents	(518)		(19,004)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	39,526		113,018		Cash and cash equivalents at beginning of period	37,771		39,526
Cash and cash equivalents and restricted cash at end of period		$	41,549	$	65,692
Less: cash and cash equivalents of discontinued operations		—		(11,263)
Cash and cash equivalents and restricted cash of continuing operations at end of period		$	41,549	$	54,429
Cash and cash equivalents at end of period						Cash and cash equivalents at end of period	$	37,253	$	20,522

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(In thousands)

Cash and cash equivalents included in the line item Assets held for sale on the Consolidated Balance Sheet as shown below, represents amounts included within held for sale accounting related to the sale of the Company's United Kingdom's fruit business, the Orchard House Foods Limited business and associated brands.


	Three Months Ended September 30,
	2020		2019
Cash and cash equivalents	$	27,523	$	20,522
Cash and cash equivalents classified in assets held for sale	9,730		0
Total cash and cash equivalents shown in the Consolidated Statements of Cash Flows	$	37,253	$	20,522

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except par values and per share data)

1. BUSINESS

The Hain Celestial Group, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company,” and herein referred to as “Hain Celestial,” “we,” “us” and “our”), was founded in 1993 and is headquartered in Lake Success, New York. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet — To Create and Inspire A Healthier Way of Life^TM and be the leading marketer, manufacturer and seller of organic and natural ~~“better-for-you”~~ products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience. The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes. Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores in over 7075 countries worldwide.

The Company manufactures, markets, distributes and sells organic and natural products under brand names, that are sold as “better-for-you” products, providing consumers with the opportunity to lead A Healthier Way of Life™. Hain Celestial is a leader in many organic and natural products categories, with many recognized brands in the various market categories it serves, including ~~Almond Dream~~^®~~, Bearitos~~^®~~, Better Bean~~^®~~, BluePrint~~^®, Celestial Seasonings^®, Clarks™~~, Coconut Dream~~^®, Cully & Sully^®, ~~Danival~~Dream^®~~, DeBoles~~^®, Earth’s Best^®, Ella’s Kitchen^®, Farmhouse Fare™, Frank Cooper’s^®, GG UniqueFiber®, Gale’s^®, Garden of Eatin’^®~~, GG UniqueFiber~~^®, Hain Pure Foods^®, Hartley’s^®, Health Valley^®, Imagine^®~~, Johnson’s Juice Co.™~~, Joya^®, Lima^®, Linda McCartney^® (under license), MaraNatha^®~~, Mary Berry (under license)~~, Natumi^®, New Covent Garden Soup Co.^®, Orchard House^®~~, Rice Dream~~^®, Robertson’s^®, Sensible Portions^®, Spectrum^®~~Organics, Soy Dream~~^®, Sun-Pat^®, Sunripe^®, Terra^®, The Greek Gods^®, ~~Walnut Acres~~^®William’s™, Yorkshire Provender^®, and Yves Veggie Cuisine^®~~and William’s™~~. The Company’s personal care products are marketed under the Alba Botanica^®, Avalon Organics^®, Earth’s Best^®, JASON^®, Live Clean^®, One Step® and Queen Helene^® brands.

The ~~Company’s~~Company continues to execute the four key pillars of its strategy ~~is to~~to: (1) simplify its portfolio; (2) strengthen its capabilities; (3) expand profit margins and cash flow; and (4) reinvigorate profitable topline growth.The Company has executed this strategy, with a focus on ~~simplifying the Company’s portfolio and reinvigorating profitable sales growth through~~ discontinuing uneconomic investment, realigning resources to coincide with ~~individual~~ brand ~~roles,~~importance, reducing unproductive stock-keeping units (“SKUs”) and brands and reassessing current pricing architecture. As part of this initiative, the Company reviewed its product portfolio within North America and ~~divided~~divided it into “Get Bigger” and “Get Better” brand categories.

•The Company’s “Get Bigger” brands represent its strongest brands with higher margins, which compete in categories with strong ~~growth. In order~~growth potential. The Company has concentrated its investment in marketing, innovation and other resources to ~~capitalize on the potential of~~prioritize spending for these brands, ~~the Company began reallocating resources~~in an effort to reinvigorate profitable topline growth, optimize assortment and increase share of distribution. ~~In addition, the Company will increase its marketing and innovation investments.~~

•The Company’s “Get Better” brands are the brands in which the Company is primarily focused on simplification and expansion of ~~profit.~~profit margin. Some of these ~~are~~brands have historically been low margin, non-strategic brands that ~~add~~added complexity with minimal benefit to the Company’s operations. Accordingly, in fiscal 2019, the Company initiated a SKU rationalization, which included the elimination of approximately 350 low velocity SKUs. The elimination of these SKUs is expected to impact sales growth in the current fiscal year, but is expected to result in expanded profits and a remaining set of core SKUs that will maintain their shelf space in the store.

AsIn addition, as part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within ~~our~~its core portfolio. ~~Accordingly,~~During fiscal 2019, for example, the Company divested ~~of all of~~ its ~~operations of the~~ Hain Pure Protein reportable segment and ~~WestSoy®~~its WestSoy® tofu, seitan and tempeh ~~businesses~~businesses. In fiscal 2020, the Company divested its Tilda business and its Arrowhead Mills®, SunSpire®, Europe's Best®, Casbah®, Rudi’s Gluten-Free Bakery™, Rudi’s Organic Bakery® and Fountain of Truth™ brands. More recently, the Company divested its Danival® business in July 2020. Additionally, in the ~~United States in~~first quarter of fiscal ~~2019,~~2021, the ~~entities comprising its Tilda operating segment and certain other assets~~Company began to actively market the sale of the ~~Tilda~~United Kingdom's fruit business, the Orchard House® Foods Limited business and associated brands, and thus, its assets and liabilities are classified as held for sale in ~~August 2019, its Arrowhead Mills®~~the Company's Consolidated Balance Sheet as of September 30, 2020. See Note 4, Assets Held for Sale and ~~SunSpire® brands in October 2019,~~Discontinued Operations, for additional information and ~~its Europe's Best® and Casbah® brands in March 2020.~~discussion of this planned divestiture.

Productivity and Transformation Costs

As part of the Company’s historical strategic review, it focused on a productivity initiative, which it called “Project Terra.” A key component of this project was the identification of global cost savings and the removal of complexity from the business. In fiscal 2019, the Company announced a ~~new transformation initiative,~~strategy that includes as one of ~~which one aspect is to identify additional~~its key pillars identifying areas of cost savings and operating efficiencies to expand profit margins and cash flow. As part of this overall strategy and the key pillar of realizing savings and efficiencies, during fiscal 2020, the Company began the integration of its United States and Canada operations in alignment with the North America reportable segment structure. In addition, during fiscal 2021, the Company initiated cost reduction programs for its international businesses in the United Kingdom and Europe. The Company will carry out additional productivity ~~savings to support sustainable profitable performance.~~initiatives under this strategy in fiscal 2021.

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Productivity and transformation costs include costs, such as consulting and severance costs, relating to streamlining the Company’s manufacturing plants, co-packers and supply chain, eliminating served categories or brands within those categories, and product rationalization initiatives which are aimed at eliminating slow moving SKUs.

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Discontinued Operations

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business, a component of the Company’s Hain Pure Protein Corporation (“HPPC”) operating segment. On June 28, 2019, the Company completed the sale of the remainder of HPPC and Empire Kosher which included the FreeBird and Empire Kosher businesses. These dispositions were undertaken to reduce complexity in the Company’s operations and simplify the Company’s brand portfolio, in addition to allowing additional flexibility to focus on opportunities for growth and innovation in the Company’s more profitable and faster growing core businesses. Collectively, these dispositions were reported in the aggregate as the Hain Pure Protein reportable segment.

These dispositions represented strategic shifts that had a major impact on the Company’s operations and financial results, and therefore, the Company is presenting the operating results and cash flows of the Tilda operating segment and the Hain Pure Protein reportable segment within discontinued operations in the current and prior ~~periods. The assets~~periods. See Note 4, Assets Held for Sale and ~~liabilities of the Tilda operating segment are presented as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of June 30, 2019. See Note 5,~~ Discontinued Operations~~, for additional information.~~

~~Change in Reportable Segments~~

Historically, the Company had 3 reportable segments: United States, United Kingdom and Rest of World. Effective July 1, 2019, the Company reassessed its segment reporting structure and as a result, the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment. Additionally, the Europe operating segment, which was included in the Rest of World reportable segment, was combined with the United Kingdom reportable segment and renamed the International reportable segment. Accordingly, the Company now operates under 2 reportable segments: North America and International. Prior period segment information contained herein has been adjusted to reflect the Company’s new operating and reporting structure. See Note 17, ~~Segment Information~~, for additional information.

2. BASIS OF PRESENTATION

The Company’s unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Investments in affiliated companies in which the Company exerts significant influence, but which it does not control, are accounted for under the equity method of accounting. As such, consolidated net loss includes the Company's equity in the current earnings or losses of such companies.

The Company's unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP and should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019~~2020 (the “Form 10-K”). The amounts as of and for the periods ended June 30, ~~2019~~2020 are derived from the Company’s audited annual financial statements. The unaudited consolidated financial statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair presentation for interim periods. Operating results for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, ~~2020.~~2021. Please refer to the Notes to the Consolidated Financial Statements as of June 30, ~~2019~~2020 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

All amounts in the unaudited consolidated financial statements, notes and tables have been rounded to the nearest thousand, except par values and per share amounts, unless otherwise indicated.

Reclassifications

Certain prior year amounts have been reclassified to conform with current year presentation.

Significant Accounting Policies

The Company's significant accounting policies are described in Note 2, Summary of Significant Accounting Policies and Practices, in the Notes to the Consolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies.

~~Leases~~

Valuation of Accounts Receivable

The Company maintains an allowance for expected uncollectible accounts receivable which is recorded as an offset to trade accounts receivable on the Consolidated Balance Sheets. Effective July 1, 2020, collectability of accounts receivable is assessed by applying a historical loss-rate methodology in accordance with Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses, adjusted as necessary based on the Company's review of accounts receivable on an individual basis, specifically

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~~Effective July 1, 2019, arrangements containing leases are evaluated as an operating~~identifying customers with known disputes or ~~finance lease at lease inception. For operating leases, the Company recognizes an operating right-of-use ("ROU") asset~~collectability issues, and ~~operating lease liability at lease commencement based on the present value of lease payments over the lease term.~~

With the exception of certain finance leases, an implicit rate of return is not readily determinable for the Company's leases. For these leases, an incremental borrowing rate is used in determining the present value of lease payments, and is calculated based on information available at the lease commencement date. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest the Company would have to pay to borrow funds on a collateralized basis over a similar term.experience with trade receivable aging categories. The Company ~~references~~also considers market ~~yield curves which~~conditions and current and expected future economic conditions to inform adjustments to historical loss data. Changes to the allowance, if any, are ~~risk-adjusted to approximate a collateralized rate~~classified as bad debt provisions in the ~~currency~~Consolidated Statements of ~~the lease. These rates are updated on a quarterly basis for measurement of new lease obligations.~~

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of 12 months or less are not recognized on the Company's Consolidated Balance Sheets. The Company has elected to separate lease and non-lease components.Operations.

Recently Adopted Accounting Pronouncements

~~The Company adopted~~In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2016-02,~~ ~~Leases (Topic 842)~~, effective July 1, 2019, using a modified retrospective approach. As permitted by the new guidance, the Company elected the package of practical expedients, which among other things, allowed historical lease classification to be carried forward.

Excluding Tilda, adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities as of July 1, 2019 of $87,414 and $92,982, respectively, with the difference largely due to prepaid and deferred rent that were reclassified to the ROU asset value. In addition, the Company recorded a cumulative-effect adjustment to opening retained earnings of $439 at adoption for the impairment of an abandoned ROU asset for a manufacturing facility in the United Kingdom that was previously impaired and the remaining lease payments were accounted for under ASC Topic 420, ~~Exit or Disposal Obligations. The standard did not materially affect the Company’s consolidated net income (loss) or cash flows. See Note 8,~~ ~~Leases, for further details.~~

~~Recently Issued Accounting Pronouncements Not Yet Effective~~

~~In June 2016, the FASB issued ASU~~ 2016-13, Measurement of Credit Losses on Financial ~~Instruments,~~Instruments, which requires measurement and recognition of expected versus incurred credit losses for most financial assets. The ~~new~~ASU applies to trade and other receivables recorded on the Consolidated Balance Sheets. The Company adopted the standard on July 1, 2020 using the modified retrospective transition method, recognizing an adjustment to beginning retained earnings of $310 reflecting the cumulative impact of adoption. The adoption did not materially impact our results of operations or financial position, and as a result, comparisons between periods were not materially affected by the adoption of ASU 2016-13.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for interim and annual reporting periods beginning after December 15, ~~2019, and for interim periods within those fiscal years.~~2019. The Company ~~is currently assessing~~adopted ASU 2017-04 on July 1, 2020, and the ~~impact that~~adoption of this standard ~~will~~did not have an impact on ~~its~~the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurement by removing, modifying or adding certain disclosures. The new guidance is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years. The Company ~~is currently assessing~~adopted ASU 2018-13 on July 1, 2020, and the ~~impact that~~adoption of this standard ~~will~~did not have an impact on ~~its~~the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amended guidance is effective for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years. The Company ~~is currently assessing~~adopted ASU 2018-15 on July 1, 2020, and the ~~impact that~~adoption of this standard ~~will~~did not have an impact on ~~its~~the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies various aspects related to accounting for income taxes and eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. The new guidance is effective for annual periods beginning after December 15, 2021, and for interim periods within those fiscal years. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform. ASU 2020-04 is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.

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3. ~~FORMER CHIEF EXECUTIVE OFFICER SUCCESSION PLAN~~

On June 24, 2018, the Company entered into a CEO succession plan, whereby the Company’s former CEO, Irwin D. Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO (the “Succession Agreement”). The Succession Agreement provided Mr. Simon with a cash separation payment of $34,295 payable in a single lump sum and cash benefits continuation costs of $208. These costs were recognized from June 24, 2018 through November 4, 2018, at which time the Company’s new CEO, Mark L. Schiller, commenced his employment. Expense recognized in connection with these payments was $33,051 during the nine months ended March 31, 2019. The cash separation payment was paid on May 6, 2019. Additionally, the Succession Agreement allowed for acceleration of vesting of all service-based awards outstanding at the termination of Mr. Simon’s employment. In connection with these accelerations, the Company recognized additional stock-based compensation expense of $429 ratably through November 4, 2018. The aforementioned impacts were recorded in Chief Executive Officer Succession Plan expense, net in the Consolidated Statements of Operations. There were no charges recognized during the three months ended March 31, 2019 related to the cash separation payment or cash benefits continuation costs.

~~As further discussed in Note13,~~ ~~Stock-based Compensation and Incentive Performance Plans,~~ in the three months ended September 30, 2018, the Company’s Compensation Committee determined that no awards would be paid or vested pursuant to the 2016-2018 LTIP. Accordingly, the Company recorded a benefit of $5,065 associated with the reversal of previously accrued amounts under the net sales portion of the 2016-2018 LTIP associated with Mr. Simon during the nine months ended March 31, 2019. The recognition of this benefit did not impact the three months ended March 31, 2019.

On October 26, 2018, the Company and Mr. Simon entered into a consulting agreement (the “Consulting Agreement”) in order to, among other things, assist Mr. Schiller with his transition as the Company’s incoming CEO. The term of the Consulting Agreement commenced on November 5, 2018 and continued until February 5, 2019. Mr. Simon received an aggregate consulting fee of $975 as compensation for his services during the consulting term, of which $325 and $975 was recognized in the Consolidated Statements of Operations as a component of “Chief Executive Officer Succession Plan expense, net” in the three and nine months ended March 31, 2019, respectively.

4. EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net income (loss) per share:

Three Months Ended March 31, Nine Months Ended March 31,
2020 2019 2020 2019
Numerator:
Net income (loss) from continuing operations $ 25,036 $ 8,783 $ 21,935 $ (46,091)
Net loss from discontinued operations, net of tax (697) (74,620) (105,581) (123,672)
Net income (loss) $ 24,339 $ (65,837) $ (83,646) $ (169,763)
Denominator:
Basic weighted average shares outstanding 104,032 104,117 104,192 104,045
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units 305 217 297 —
Diluted weighted average shares outstanding 104,337 104,334 104,489 104,045
Basic net income (loss) per common share⁽¹⁾:
Continuing operations $ 0.24 $ 0.08 $ 0.21 $ (0.44)
Discontinued operations (0.01) (0.72) (1.01) (1.19)
Basic net income (loss) per common share $ 0.23 $ (0.63) $ (0.80) $ (1.63)
Diluted net income (loss) per common share⁽¹⁾:
Continuing operations $ 0.24 $ 0.08 $ 0.21 $ (0.44)
Discontinued operations (0.01) (0.72) (1.01) (1.19)
Diluted net income (loss) per common share $ 0.23 $ (0.63) $ (0.80) $ (1.63)
⁽¹⁾Net income (loss) per common share may not add in certain periods due to rounding.

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	Three Months Ended September 30,
	2020		2019
Numerator:
Net loss from continuing operations	$	(10,781)	$	(4,953)
Net income (loss) from discontinued operations	11,266		(102,068)
Net income (loss)	$	485	$	(107,021)

Denominator:
Basic weighted average shares outstanding	101,558		104,225
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units	0		0
Diluted weighted average shares outstanding	101,558		104,225

Basic net (loss) income per common share:
Continuing operations	$	(0.11)	$	(0.05)
Discontinued operations	0.11		(0.98)
Basic net loss per common share	$	0	$	(1.03)

Diluted net (loss) income per common share:
Continuing operations	$	(0.11)	$	(0.05)
Discontinued operations	0.11		(0.98)
Diluted net loss per common share	$	0	$	(1.03)

Basic net (loss) income ~~(loss)~~ per share excludes the dilutive effects of stock options, unvested restricted stock and unvested restricted share units.

Due to our net loss in the ~~nine~~three months ended ~~March 31,~~ September 30, 2020 and 2019, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per common share because the effect would have been anti-dilutive to the computations in the period. Diluted earnings per share for the three and nine months ended March 31, 2020 and the three months ended March 31, 2019 includes the dilutive effects of common stock equivalents such as stock options and unvested restricted stock awards.

There were ~~512~~440 and ~~273~~786 restricted stock awards and stock options excluded from our calculation of diluted net income (loss) per share for the three months ended ~~March 31,~~September 30, 2020 and 2019, respectively, as such awards were anti-dilutive. Additionally, there were ~~2,616~~2,548 and ~~3,071~~2,910 stock-based awards excluded for the three months ended ~~March 31,~~September 30, 2020 and 2019, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

There were 450 and 731 restricted stock awards and stock options excluded from our calculation of diluted net income (loss) per share for the nine months ended March 31, 2020 and 2019, respectively, as such awards were anti-dilutive. Additionally, there were 2,685 and 3,117 stock-based awards excluded for the nine months ended March 31, 2020 and 2019, respectively, as such awards were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods.

Share Repurchase Program

On June 21, 2017, the Company's Board of Directors authorized the repurchase of up to $250,000 of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate ~~considerations, including the Company’s historical strategy of pursuing accretive acquisitions.~~considerations. During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020, the Company repurchased ~~2,439~~1,281 shares under the repurchase program for a total of ~~$57,357,~~$42,027, excluding commissions, at an average price of ~~$23.52~~$32.81 per share. As of ~~March 31,~~September 30, 2020, the Company had ~~$192,643~~$147,803 of remaining authorization under the share repurchase program.

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4. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Assets Held for Sale

Fruit

In August 2020, the Company’s Board of Directors approved a plan to sell the operations of its prepared fresh fruit, fresh fruit drinks and fresh fruit desserts division ("Fruit"), primarily consisting of the Orchard House Foods Limited business and associated brands. This decision supports the Company's overall strategy as the Fruit business does not align and has limited synergies with the rest of the Company's businesses. Fruit operates out of the United Kingdom and is part of the Company's International reportable segment, comprising 7.8% and 11.3% of the Company's net sales during the three months ended September 30, 2020 and 2019, respectively. The Company determined that the held for sale criteria was met and classified the assets and liabilities of the Fruit business as held for sale during the quarter ended September 30, 2020, recognizing a pre-tax non-cash loss of $32,497 to reduce the carrying value to its estimated fair value, less costs to sell.

The assets and liabilities of the Fruit business classified as held for sale in the Company's Consolidated Balance Sheets consisted of the following:


	September 30,
	2020
ASSETS
Cash and cash equivalents	$	9,730
Accounts receivable, less allowance for doubtful accounts	13,873
Inventories	3,990
Prepaid expenses and other current assets	3,609
Property, plant and equipment, net	23,060
Goodwill	13,486
Other intangible assets, net	32,806
Operating lease right-of-use assets	2,765
Allowance for reduction of assets held for sale	(32,296)
Assets held for sale	$	71,023
LIABILITIES
Accounts payable	$	10,810
Accrued expenses and other current liabilities	4,631
Operating lease liabilities	2,591
Deferred tax liabilities	6,633
Other liabilities	1,544
Liabilities related to assets held for sale	$	26,209

Danival

The Company entered into a definitive stock purchase agreement on June 30, 2020 for the sale of its Danival business, a component of the International reportable segment, and the transaction closed on July 21, 2020. As of June 30, 2020, the Company determined the held for sale criteria was met, resulting in assets held for sale of $8,334 and related liabilities held for sale of $3,567 being included in the Company's Consolidated Balance Sheet as of June 30, 2020. These assets and liabilities were previously presented within Prepaid and other current assets and Accrued expenses and other liabilities, respectively, in the Form 10-K and have been reclassified to conform to current year presentation. The Company deconsolidated the net assets of the Danival business upon closing of sale during the quarter ended September 30, 2020.

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Discontinued Operations

Sale of Tilda Business

On August 27, 2019, ~~the Company and the Purchaser entered into and consummated the transactions contemplated by the Sale and Purchase Agreement. Under the Sale and Purchase Agreement,~~ the Company sold the entities comprising its Tilda operating segment (the “Tilda Group Entities”) and certain other assets of the Tilda business to the Purchaser for an aggregate price of $342,000 in cash, subject to customary post-closing adjustments based on the balance sheets of the Tilda business. The other assets sold in the transaction consisted of raw materials, consumables, packaging, and finished and unfinished goods related to the Tilda business held by other Company entities that are not Tilda Group Entities. In January 2020, the Company and the Purchaser agreed to fully resolve all matters relating to post-closing adjustments to the sale price, resulting in a final aggregate sale price of $341,800. The Company used the proceeds from the sale to pay down the remaining outstanding borrowings under its term loan and a portion of its revolving credit facility.

The ~~Sale and Purchase Agreement contains representations, warranties and covenants that are customary for a transaction of this nature. The~~ Company also entered into certain ancillary agreements with the Purchaser and certain of the Tilda Group Entities in connection with the Sale and Purchase Agreement, including a transitional services agreement (the "TSA") pursuant to which the Company and the Purchaser ~~provide~~provided transitional services to one another, and business transfer agreements pursuant to which the applicable Tilda Group Entities ~~will transfer~~transferred certain non-Tilda assets and liabilities in India and the United Arab Emirates to subsidiaries of the Company to be formed in those countries. Additionally, the Company ~~will distribute~~distributed certain Tilda products in the United States, Canada and Europe through the expiration of the ~~TSA.~~TSA, which expired during the second quarter of fiscal 2020.

The disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations.

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The following table presents the major classes of Tilda’s results within “Net income (loss) from discontinued operations, net of tax” in our Consolidated Statements of Operations:


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019		2020		2019			2020		2019
Net sales	Net sales	$	—	$	52,540	$	30,399	$	145,485	Net sales	$	0	$	27,732
Cost of sales	Cost of sales	—		40,479		26,648		109,816		Cost of sales	0		24,152
Gross profit	Gross profit	—		12,061		3,751		35,669		Gross profit	0		3,580
Selling, general and administrative expense	Selling, general and administrative expense	—		6,651		5,185		19,823		Selling, general and administrative expense	0		4,939

Other expense	Other expense	—		539		1,172		1,622		Other expense	75		348
Interest expense⁽¹⁾	Interest expense⁽¹⁾	—		3,395		2,432		10,177		Interest expense(1)	0		2,432
Translation loss⁽²⁾	Translation loss⁽²⁾	—		—		95,120		—		Translation loss(2)	0		95,120
Loss (gain) on sale of discontinued operations		540		—		(9,630)		—
Net (loss) income from discontinued operations before income taxes		(540)		1,476		(90,528)		4,047
Gain on sale of discontinued operations										Gain on sale of discontinued operations	0		(13,922)
Net loss from discontinued operations before income taxes										Net loss from discontinued operations before income taxes	(75)		(85,337)
(Benefit) provision for income taxes⁽³⁾	(Benefit) provision for income taxes⁽³⁾	(965)		171		12,900		247		(Benefit) provision for income taxes(3)	(11,331)		15,700
Net income (loss) from discontinued operations, net of tax	Net income (loss) from discontinued operations, net of tax	$	425	$	1,305	$	(103,428)	$	3,800	Net income (loss) from discontinued operations, net of tax	$	11,256	$	(101,037)

(1) Interest expense was allocated to discontinued operations based on borrowings repaid with proceeds from the sale of Tilda.

(2) At the completion of the sale of Tilda, the Company reclassified $95,120 of related cumulative translation losses from Accumulated other comprehensive loss to discontinued operations, net of tax.

(3) Includes a$11,331 of tax ~~(benefit) provision~~benefit related to the legal entity reorganization and $16,500 of tax expense related to the tax gain on the sale of Tilda ~~of $(750) and $14,500~~ for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020 and 2019, respectively.

~~Assets and~~There were 0 assets or liabilities offrom discontinued operations associated with Tilda ~~presented in the Consolidated Balance Sheets~~ as of September 30, 2020 or June 30, ~~2019 are included in the following table:~~2020.


	~~June 30,~~
~~ASSETS~~	~~2019~~
~~Cash and cash equivalents~~	$	~~8,509~~
~~Accounts receivable, less allowance for doubtful accounts~~	~~26,955~~
~~Inventories~~	~~65,546~~
~~Prepaid expenses and other current assets~~	~~9,038~~
~~Total current assets of discontinued operations~~⁽¹⁾	~~110,048~~
~~Property, plant and equipment, net~~	~~40,516~~
~~Goodwill~~	~~133,098~~
~~Trademarks and other intangible assets, net~~	~~84,925~~
~~Other assets~~	~~628~~
~~Total noncurrent assets of discontinued operations~~⁽¹⁾	~~259,167~~

~~Total assets of discontinued operations~~	$	~~369,215~~

~~LIABILITIES~~
~~Accounts payable~~	$	~~18,341~~
~~Accrued expenses and other current liabilities~~	~~4,675~~
~~Current portion of long-term debt~~	~~8,687~~
~~Total current liabilities of discontinued operations~~⁽¹⁾	~~31,703~~
~~Deferred tax liabilities~~	~~17,153~~
~~Other noncurrent liabilities~~	~~208~~
~~Total noncurrent liabilities of discontinued operations~~⁽¹⁾	~~17,361~~
~~Total liabilities of discontinued operations~~⁽¹⁾	$	~~49,064~~

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~~(1) Assets and liabilities from discontinued operations were classified as current and noncurrent at June 30, 2019 as they did not meet the held-for-sale criteria.~~

Sale of Hain Pure Protein Reportable Segment

In March 2018, the Company’s Board of Directors approved a plan to sell all of the operations of the ~~HPPC~~Hain Pure Protein Corporation ("HPPC") operating segment, which included the Plainville Farms and FreeBird businesses, and the EK Holdings, Inc. (“Empire Kosher” or “Empire”) operating segment, which were reported in the aggregate as the Hain Pure Protein reportable segment.

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Collectively, these dispositions represented a strategic shift that had a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations.

The Company is presenting the operating results and cash flows of Hain Pure Protein within discontinued operations in the current and prior periods.

Sale of Plainville Farms Business ("Plainville")

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for ~~the~~ Plainville ~~Farms business~~ (a component of HPPC), which included $25,000 in cash to the purchaser, for a nominal purchase price. In addition, the purchaser assumed the current liabilities of ~~the~~ Plainville ~~Farms business~~ as of the closing date. As a condition to consummating the sale, the Company entered into a Contingent Funding and Earnout Agreement, which provided for the issuance by the Company of an irrevocable stand-by letter of credit (the “Letter of Credit”) of $10,000 which ~~expires~~expired nineteen months after ~~issuance. As~~issuance, during the first quarter of ~~June 30, 2019, the purchaser has fully drawn against the Letter of Credit.~~fiscal 2021. The Company iswas entitled to receive an earnout not to exceed, in the aggregate, 120% of the maximum amount that the purchaser draws on the Letter of Credit at any point from the date of issuance through the expiration of the Letter of Credit. Earnout payments are based on a specified percentage of annual free cash flow achieved for all fiscal years ending on or prior to June 30, 2026. If a subsequent change in control of ~~the~~ Plainville ~~Farms business~~ occurs prior to June 30, 2026, the purchaser will pay the Company 120% of the difference between the amount drawn on the Letter of Credit less the sum of all earnout payments made prior to such time up to the net proceeds received by the ~~purchaser.~~purchaser. At ~~March 31,~~September 30, 2020, the Company had not recorded an asset associated with the earnout.

Sale of HPPC and Empire Kosher

On June 28, 2019, the Company completed the sale of the remainder of HPPC and EK Holdings, which included the FreeBird and Empire Kosher businesses. The purchase price, net of estimated customary adjustments based on the closing balance sheet of HPPC, was $77,714. ~~The Company is in the process of finalizing the closing adjustments.~~ The Company used the proceeds from the sale to pay down a portion of its outstanding borrowings under its term loan.

The following table presents the major classes of Hain Pure Protein’s results within “Net loss from discontinued operations, net of tax” in our Consolidated Statements of Operations:


		Three Months Ended March 31,								Nine Months Ended March 31,									Three Months Ended September 30,
				2020			2019		2020			2019			2020			2019
Net sales	Net sales	$	—		$	88,729	$	—		$	349,449	Net sales	$			$	0
Cost of sales	Cost of sales	—			88,277		—			356,073		Cost of sales	0			0
Gross profit (loss)	Gross profit (loss)	—			452		—			(6,624)		Gross profit (loss)	0			0
Selling, general and administrative expense	Selling, general and administrative expense	—			4,039		—			13,031		Selling, general and administrative expense	0			0
Asset impairments	Asset impairments	—			51,348		—			109,252		Asset impairments	0			0
Other expense	Other expense	—			2,182		—			7,377		Other expense	(10)			0
Loss on sale of discontinued operations⁽¹⁾	Loss on sale of discontinued operations⁽¹⁾	1,781			40,223		3,205			40,223		Loss on sale of discontinued operations(1)	0			1,424
Net loss from discontinued operations before income taxes		(1,781)			(97,340)		(3,205)			(176,507)
Net income (loss) from discontinued operations before income taxes												Net income (loss) from discontinued operations before income taxes	10			(1,424)
Benefit for income taxes	Benefit for income taxes	(659)			(21,415)		(1,052)			(49,035)		Benefit for income taxes	0			(393)
Net loss from discontinued operations, net of tax		$	(1,122)		$	(75,925)	$	(2,153)		$	(127,472)
Net income (loss) from discontinued operations, net of tax												Net income (loss) from discontinued operations, net of tax	$	10		$	(1,031)

(1) Primarily relates to preliminary closing balance sheet adjustments.

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There were 0 assets or liabilities from discontinued operations associated with Hain Pure Protein at ~~March 31,~~September 30, 2020 or June 30, ~~2019.~~2020.

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6.5. INVENTORIES

Inventories consisted of the following:


		March 31, 2020		June 30, 2019			September 30, 2020		June 30, 2020
Finished goods	Finished goods	$	154,451	$	199,754	Finished goods	$	192,470	$	158,162
Raw materials, work-in-progress and packaging	Raw materials, work-in-progress and packaging	83,682		99,587		Raw materials, work-in-progress and packaging	100,498		90,008
		$	238,133	$	299,341		$	292,968	$	248,170

At each period end, inventory is reviewed to ensure that it is recorded at the lower of cost or net realizable value. During the ~~nine~~three months ended ~~March 31,~~September 30, 2020 and the fiscal year ended June 30, ~~2019,~~2020, the Company recorded inventory write-downs of $~~5,278~~204 and ~~$12,381,~~$4,175, respectively, primarily related to the discontinuance of slow moving SKUs as part of a product rationalization ~~initiative.~~initiatives.

7.6. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:


		March 31, 2020		June 30, 2019			September 30, 2020		June 30, 2020
Land	Land	$	13,920	$	14,240	Land	$	14,162	$	13,866
Buildings and improvements	Buildings and improvements	81,645		83,151		Buildings and improvements	69,246		74,325
Machinery and equipment	Machinery and equipment	276,569		274,554		Machinery and equipment	284,048		288,466
Computer hardware and software	Computer hardware and software	59,220		48,984		Computer hardware and software	58,320		60,391
Furniture and fixtures	Furniture and fixtures	19,417		17,325		Furniture and fixtures	21,095		20,044
Leasehold improvements	Leasehold improvements	39,478		32,264		Leasehold improvements	39,139		40,876
Construction in progress	Construction in progress	16,192		35,786		Construction in progress	19,295		16,489
		506,441		506,304			505,305		514,457
Less: accumulated depreciation and amortization	Less: accumulated depreciation and amortization	218,812		218,459		Less: accumulated depreciation and amortization	229,597		225,201
		$	287,629	$	287,845		$	275,708	$	289,256

Depreciation and amortization expense for the three months ended ~~March 31,~~September 30, 2020 and 2019 was $~~7,789~~9,703 and ~~$7,105, respectively. Such expense for the nine months ended March 31, 2020 and 2019 was $23,518 and $21,335,~~$7,705, respectively.

In ~~each of~~ the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020, the Company ~~recorded $5,875~~reclassified $23,060 of ~~non-cash~~Property, plant and equipment, net to Assets held for sale as part of the held for sale accounting related to the Company's Fruit business (see Note 4, Assets Held for Sale and Discontinued Operations, for more information related to the held for sale assets). There were 0 impairment charges ~~primarily related to a write-down of certain machinery and equipment~~recorded in the ~~United States and Europe used to manufacture certain slow moving or low margin SKUs.~~three months ended September 30, 2019.

In the nine months ended March 31, 2019, the Company recorded $5,275 of non-cash impairment charges primarily related to the Company’s decision to consolidate manufacturing of certain fruit-based products in the United Kingdom. Additionally, the Company recorded a $534 non-cash impairment charge to write-down the value of certain machinery and equipment used to manufacture certain slow moving SKUs in the United States that were discontinued.

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7. LEASES

The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. A limited number of lease agreements include rental payments adjusted periodically for inflation.

Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease

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commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020 were as follows:

Three Months Ended Nine Months Ended
March 31, 2020 March 31, 2020
Operating lease expenses $ 4,545 $ 14,034
Finance lease expenses 272 761
Variable lease expenses 633 1,873
Short-term lease expenses 490 1,349
Total lease expenses $ 5,940 $ 18,017


	Three Months Ended
	September 30, 2020		September 30, 2019
Operating lease expenses	$	3,956	$	4,689



Finance lease expenses	185		301
Variable lease expenses	866		859
Short-term lease expenses	555		440
Total lease expenses	$	5,562	$	6,289

Supplemental balance sheet information related to leases was as follows:

~~Leases~~

~~Classification~~

~~March 31, 2020~~

~~Assets~~

~~Operating lease ROU assets~~

~~Operating lease right-of-use assets~~

~~81,959~~

~~Finance lease ROU assets, net~~

~~Property, plant and equipment, net~~

~~1,091~~

~~Total leased assets~~

~~83,050~~

~~Liabilities~~

~~Current~~

~~Operating~~

~~Accrued expenses and other current liabilities~~

~~13,402~~

~~Finance~~

~~Current portion of long-term debt~~

~~357~~

~~Non-current~~

~~Operating~~

~~Operating lease liabilities, noncurrent portion~~

~~74,937~~

~~Finance~~

~~Long-term debt, less current portion~~

~~333~~

~~Total lease liabilities~~

~~89,029~~


Leases	Classification	September 30, 2020		June 30, 2020
Assets
Operating lease ROU assets, net	Operating lease right-of-use assets	$	89,397	$	88,165
Operating lease ROU assets, net	Assets held for sale	2,765		0
Finance lease ROU assets, net	Property, plant and equipment, net	435		691
Total leased assets		$	92,597	$	88,856

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	13,146	$	12,338
Operating	Liabilities related to assets held for sale	2,591		0
Finance	Current portion of long-term debt	228		308
Non-current
Operating	Operating lease liabilities, noncurrent portion	82,962		82,962
Finance	Long-term debt, less current portion	210		316
Total lease liabilities		$	99,137	$	95,924

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Additional information related to leases is as follows:


	~~Nine Months Ended~~
	~~March 31, 2020~~
~~Supplemental cash flow information~~
~~Cash paid for amounts included in the measurement of lease liabilities:~~
~~Operating cash flows from operating leases~~	$	~~12,856~~
~~Operating cash flows from finance leases~~	$	18
~~Financing cash flows from finance leases~~	$	~~372~~
~~ROU assets obtained in exchange for lease obligations~~ ^(a):
~~Operating leases~~	$	~~94,389~~
~~Finance leases~~	$	~~1,092~~
~~Weighted average remaining lease term:~~
~~Operating leases~~	~~8.4 years~~
~~Finance leases~~	~~2.3 years~~
~~Weighted average discount rate:~~
~~Operating leases~~	~~2.7~~		%
~~Finance leases~~	~~2.9~~		%


	Three Months Ended
	September 30, 2020			September 30, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,359		$	3,735
Operating cash flows from finance leases	$	3		$	6
Financing cash flows from finance leases	$	85		$	119
ROU assets obtained in exchange for lease obligations (a):
Operating leases	$	7,766		$	86,213
Finance leases	$	15		$	948
Weighted average remaining lease term:
Operating leases	10.1 years			8.9 years
Finance leases	2.1 years			2.3 years
Weighted average discount rate:
Operating leases	3.0		%	3.2		%
Finance leases	2.6		%	2.2		%

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^(a) ROU assets obtained in exchange for lease obligations includes leases which commenced, were modified or terminated. The three months ended September 30, 2019 also includes $87,414 relating to the impact of the adoption of ASU 2016-02 effective July 1, ~~2019 (see Note 2) and leases which commenced, were modified or terminated during the nine months ended March 31, 2020.~~2019.

Maturities of lease liabilities as of ~~March 31,~~September 30, 2020 were as follows:


Fiscal Year	Fiscal Year	Operating leases		Finance leases		Total		Fiscal Year	Operating leases		Finance leases		Total
2020 (remainder of year)		$	3,224	$	85	$	3,309
2021		15,642		356		15,998
2021 (remainder of year)								2021 (remainder of year)	$	10,570	$	173	$	10,743
2022	2022	13,472		180		13,652		2022	14,399		195		14,594
2023	2023	12,514		54		12,568		2023	13,460		82		13,542
2024	2024	10,543		26		10,569		2024	11,539		0		11,539
2025								2025	10,162		0		10,162
Thereafter	Thereafter	44,177		6		44,183		Thereafter	57,367		0		57,367
Total lease payments	Total lease payments	99,572		707		100,279		Total lease payments	117,497		450		117,947
Less: Imputed interest	Less: Imputed interest	11,233		17		11,250		Less: Imputed interest	18,798		12		18,810
Total lease liabilities	Total lease liabilities	$	88,339	$	690	$	89,029	Total lease liabilities	$	98,699	$	438	$	99,137

~~The aggregate minimum future~~Maturities of lease ~~payments for operating leases at~~liabilities as of June 30, ~~2019~~2020 were as follows:


Fiscal Year	Fiscal Year			Fiscal Year	Operating leases		Finance leases		Total
2020		$	19,426
2021	2021	16,584		2021	$	14,781	$	308	$	15,089
2022	2022	14,218		2022	13,798		205		14,003
2023	2023	13,221		2023	12,833		95		12,928
2024	2024	11,041		2024	10,941		18		10,959
2025				2025	9,521		6		9,527
Thereafter	Thereafter	44,452		Thereafter	51,545		0		51,545
		$	118,942
Total lease payments				Total lease payments	113,419		632		114,051
Less: Imputed interest				Less: Imputed interest	18,119		8		18,127
Total lease liabilities				Total lease liabilities	$	95,300	$	624	$	95,924

At ~~March 31,~~September 30, 2020, the Company had ~~additional leases~~an operating lease that had not yet commenced. Obligations under ~~these leases~~this lease are ~~not material.~~approximately $6,095, and the lease is expected to commence during the fiscal year ending June 30, 2021 with a lease term of 10 years, excluding renewal options.

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9.8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table provides the changes in the carrying value of goodwill by reportable segment:

North America International Total
Balance as of June 30, 2019 ^(a)
$ 612,590 $ 263,291 $ 875,881
Divestiture (4,797) — (4,797)
Translation and other adjustments, net (3,192) (6,825) (10,017)
Balance as of March 31, 2020^(a)
$ 604,601 $ 256,466 $ 861,067


	North America		International		Total
Balance as of June 30, 2020 (a)	$	606,055	$	255,903	$	861,958


Reclassification of goodwill to Assets held for sale	0		(13,486)		(13,486)

Translation and other adjustments, net	540		11,335		11,875
Balance as of September 30, 2020 (a)	$	606,595	$	253,752	$	860,347

(a) The total carrying value of goodwill is reflected net of $134,277 of accumulated impairment charges, of which $97,358 related to the Company’s United Kingdom operating segment, $29,219 related to the Company’s Europe operating segment and $7,700 related to the Company’s former Hain Ventures operating segment, whose goodwill and accumulated impairment charges were reallocated within the North America reportable segment to the United States and Canada operating segments on a relative fair value basis.

During fiscal 2019, the Company’s reporting units were Hain Pure Personal Care, Grocery and Snacks and Celestial Tea in the United States reportable segment, Hain Daniels, Ella’s Kitchen and Tilda in the United Kingdom reportable segment and Hain Canada, Hain Europe and Hain Ventures within the Rest of World reportable segment. As discussed in Note 17, ~~Segment Information,~~ effective July 1, 2019, the Company changed its segment reporting structure due to changes in how the Company’s Chief Operating Decision Maker (“CODM”) assesses the Company’s performance and allocates resources as a result of a change in the Company’s strategy. In

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connection with these changes, the Company’s reporting units now consist of the United States (as a single reporting unit) and Hain Canada within the North America reportable segment and Hain Daniels, Ella’s Kitchen, Tilda (prior to its sale on August 27, 2019) and Hain Europe within the International reportable segment. The brands constituting the Hain Ventures reporting unit were combined within the United States and Hain Canada reporting units, and its goodwill was reallocated to the United States and Canada operating segments on a relative fair value basis. The Company completed an assessment for potential impairment of the goodwill both prior and subsequent to the aforementioned changes and determined that no impairment indicators were present.

On October 7, 2019, the Company completed the divestiture of its Arrowhead and SunSpire businesses, components of the United States reporting unit, for a purchase price of $13,347 following post-closing adjustments, recognizing a loss on sale of $2,037 during the nine months ended March 31, 2020, $254 of which was recognized during the third quarter. Goodwill of $4,357 was assigned to the divested businesses on a relative fair value basis. An interim impairment analysis was performed for the United States reporting unit both before and after the sale, noting no impairment indicators were present.

During March 2020, the Company completed the divestiture of its Europe's Best and Casbah businesses, components of the Canada reporting unit, in two separate transactions for a combined purchase price of $1,759. Goodwill of $440 was assigned to the divested businesses on a relative fair value basis. An interim impairment analysis was performed for the Canada reporting unit both before and after the sale, noting no impairment indicators were present. The gain/loss on sale recognized during the three months ended ~~March 31,~~September 30, 2020, ~~as a result~~operations of the ~~transactions~~United Kingdom's Fruit business, a part of the International reportable segment, have been classified as held for sale and therefore, goodwill associated with Fruit was ~~insignificant.~~reclassified to Assets held for sale within the Consolidated Balance Sheet as of September 30, 2020. See Note 4, Assets Held for Sale and Discontinued Operations, for more information.

~~Beginning~~The Fruit business was a component of the Company's Hain Daniels reporting unit prior to being classified as held for sale. The decision to sell the business was a triggering event requiring an interim goodwill impairment test for the Hain Daniels reporting unit. No impairment was recorded in the three months ended September 30, ~~2019, operations of Tilda have been classified as discontinued operations as discussed in Note 5,~~ ~~Discontinued Operations. Therefore, goodwill associated with Tilda is presented as Assets of discontinued operations in the consolidated financial statements.~~2020.

Other Intangible Assets

The following table includes the gross carrying amount and accumulated amortization, where applicable, for intangible assets, excluding goodwill:


		March 31, 2020		June 30, 2019			September 30, 2020		June 30, 2020
Non-amortized intangible assets:	Non-amortized intangible assets:					Non-amortized intangible assets:
Trademarks and tradenames ^(a)	Trademarks and tradenames ^(a)	$	278,057	$	291,199	Trademarks and tradenames (a)	$	274,196	$	278,103
Amortized intangible assets:	Amortized intangible assets:					Amortized intangible assets:
Other intangibles	Other intangibles	200,425		204,630		Other intangibles	148,212		184,854
Less: accumulated amortization	Less: accumulated amortization	(122,768)		(115,543)		Less: accumulated amortization	(102,648)		(116,495)
Net carrying amount	Net carrying amount	$	355,714	$	380,286	Net carrying amount	$	319,760	$	346,462

(a) The gross carrying value of trademarks and tradenames is reflected net of $93,273 ~~and $83,734~~ of accumulated impairment charges as of ~~March 31,~~both September 30, 2020 and June 30, ~~2019, respectively.~~2020.

~~During the nine months ended March 31, 2020 and 2019, the Company determined~~There were no events or circumstances that ~~indicators of impairment existed in certain of the Company’s indefinite-lived tradenames. The Company performed~~warranted an interim impairment analyses during the respective periods, and determined that the fair value of certain of the Company’s tradenames was below their carrying value. During the three and nine months ended March 31, 2020, the Company recognized impairment ~~charges of $7,650 ($2,118 in the North America segment and $5,532 in the International segment) and $9,539~~ ~~($4,007 in the North America segment and $5,532 in the International segment), respectively. During the nine months ended March 31, 2019, the Company recognized an impairment charge of~~ ~~$17,900~~ ~~($15,113 in the North America segment and $2,787 in the International segment). There were 0 such impairment charges recognized~~test for indefinite-lived intangible assets during the three months ended ~~March 31,~~ September 30, 2020 or 2019.

During the three months ended September 30, 2020, $32,806 of customer relationship assets were reclassified to Assets held for sale in relation to the held for sale classification of the Fruit business.

During the three months ended September 30, 2020, the Company reclassified certain of its indefinite-lived intangible assets consisting of trademarks and tradenames to definite-lived intangible assets and began amortization of these assets. The annualized amortization expense of these assets is $914 and will amortize over an estimated useful life of 10 years.

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Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships and trademarks and tradenames and are amortized over their estimated useful lives of 3 to 25 years. Amortization expense included in continuing operations was as follows:

Three Months Ended March 31, Nine Months Ended March 31,
2020 2019 2020 2019
Amortization of acquired intangibles $ 3,174 $ 3,265 $ 9,446 $ 9,946


	Three Months Ended September 30,
	2020		2019
Amortization of acquired intangibles	$	2,433	$	3,083

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~~10.~~9. DEBT AND BORROWINGS

Debt and borrowings consisted of the following:


		March 31, 2020		June 30, 2019			September 30, 2020		June 30, 2020
Revolving credit facility	Revolving credit facility	$	362,169	$	420,575	Revolving credit facility	$	288,000	$	280,000
Term loan		—		206,250
Less: Unamortized issuance costs		—		(1,022)

Other borrowings	Other borrowings	3,398		4,966		Other borrowings	1,487		2,774
		365,567		630,769			289,487		282,774
Short-term borrowings and current portion of long-term debt	Short-term borrowings and current portion of long-term debt	2,041		17,232		Short-term borrowings and current portion of long-term debt	445		1,656
Long-term debt, less current portion	Long-term debt, less current portion	$	363,526	$	613,537	Long-term debt, less current portion	$	289,042	$	281,118

Credit Agreement

On February 6, 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a $1,000,000 revolving credit facility through February 6, 2023 and provides for a $300,000 term loan. Under the Credit Agreement, the revolving credit facility may be increased by an additional uncommitted $400,000, provided certain conditions are met.

Borrowings under the Credit Agreement may be used to provide working capital, finance capital expenditures and permitted acquisitions, refinance certain existing indebtedness and for other lawful corporate purposes. The Credit Agreement provides for multicurrency borrowings in ~~euros, pounds sterling~~Euros, Pounds Sterling and Canadian ~~dollars~~Dollars as well as other currencies which may be designated. In addition, certain wholly-owned foreign subsidiaries of the Company may be designated as co-borrowers. The Credit Agreement contains restrictive covenants, which are usual and customary for facilities of its type, and include, with specified exceptions, limitations on the Company’s ability to engage in certain business activities, incur debt, have liens, make capital expenditures, pay dividends or make other distributions, enter into affiliate transactions, consolidate, merge or acquire or dispose of assets, and make certain investments, acquisitions and loans. The Credit Agreement also requires the Company to satisfy certain financial covenants. Obligations under the Credit Agreement are guaranteed by certain existing and future domestic subsidiaries of the Company. As of ~~March 31,~~September 30, 2020, there were~~$362,169~~ $288,000 of ~~borrowings~~borrowings outstanding under the revolving credit ~~facility~~facility and $9,698 let~~$9,698~~ ~~letters~~ters of credit outstanding under the Credit Agreement. In the ~~nine~~three months ended ~~March 31, 2020,~~September 30, 2019, the Company used the proceeds from the sale of Tilda, net of transaction costs, to prepay the entire principal amount of term loan outstanding under its credit facility and to partially pay down its revolving credit facility. In connection with the prepayment, the Company wrote off unamortized deferred debt issuance costs of $973, recorded in Interest and other financing expense, net in the Consolidated Statements of Operations.

On May 8, 2019, the Company entered into the Third Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), whereby, among other things, its allowable consolidated leverage ratio (as defined in the Credit Agreement) and interest coverage ratio (as defined in the Credit Agreement) were adjusted. The Company’s allowable consolidated leverage ratio is no more than 4.75 to 1.0 from March 31, 2019 to December 31, 2019, no more than 4.50 to 1.0 at March 31, 2020, no more than 4.0 to 1.0 at June 30, 2020 and no more than 3.75 to 1.0 on September 30, 2020 and thereafter. Additionally, the Company’s required consolidated interest coverage ratio is no less than 3.0 to 1 through March 31, 2020, no less than 3.75 to 1 through March 31, 2021 and no less than 4.0 to 1 thereafter.

The Amended Credit Agreement also required that the Company and the subsidiary guarantors enter into a Security and Pledge Agreement pursuant to which all of the obligations under the Amended Credit Agreement are secured by liens on assets of the Company and its material domestic subsidiaries, including stock of each of their direct subsidiaries and intellectual property, subject to agreed upon exceptions.

As of ~~March 31,~~September 30, 2020, $~~628,133~~702,302 was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants, as amended by the Amended Credit Agreement.

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The Amended Credit Agreement provides that loans will bear interest at rates based on (a) the Eurocurrency Rate, as defined in the Credit Agreement, plus a rate ranging from 0.875% to 2.50% per annum; or (b) the Base Rate, as defined in the Credit Agreement, plus a rate ranging from 0.00% to 1.50% per annum, the relevant rate being the Applicable Rate. The Applicable Rate will be determined in accordance with a leverage-based pricing grid, as set forth in the Amended Credit Agreement. Swing Line loans and Global Swing Line loans denominated in U.S. dollars will bear interest at the Base Rate plus the Applicable Rate, and Global Swing Line loans denominated in foreign currencies shall bear interest based on the overnight Eurocurrency Rate for loans denominated in such currency plus the Applicable Rate. The weighted average interest rate on outstanding borrowings under the Amended Credit Agreement at ~~March 31,~~September 30, 2020 was ~~2.51%~~1.52%. Additionally, the Amended Credit Agreement contains a Commitment Fee, as defined in the Amended Credit Agreement, on the amount unused under the Amended Credit Agreement ranging from 0.20% to 0.45% per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

~~11.~~10. INCOME TAXES

In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. ~~The Company calculated its tax rate on a discrete basis for the nine months ended March 31, 2019 due to significant variations in the relationship between tax expense and projected pre-tax income.~~ Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability on the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements.

On March 27, 2020, H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into legislation which includes tax provisions relevant to businesses that will impact taxes related to 2018, 2019, and 2020. Some of the significant tax law changes are to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five year carryback of net operating losses for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, provide for the acceleration of depreciation expense from 2018 and forward on qualified improvement property, and accelerate the ability to claim refunds of Alternative Minimum Tax ("AMT") credit carryforwards. The Company is required to recognize the effect on the consolidated financial statements in the period the law was enacted, which is March 31, 2020. The Company is carrying back net operating losses generated in the June 30, 2019 tax year for five years, resulting in an estimated income statement benefit of $12,538, excluding the indirect tax benefit of $2,800 related to discontinued operations, and a tax refund receivable of $48,415 which is included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company continues to assess the impact of the CARES Act and additional guidance that is released related to COVID-19.

The effective income tax rate from continuing operations was expense of 589.2% and a benefit of ~~66.7% and expense of 24.7%~~10.3% for the three months ended ~~March 31, 2020 and 2019, respectively. The effective income tax rate from continuing operations was a benefit of 72.8% and a benefit of 4.0% for the nine months ended March 31,~~September 30, 2020 and 2019, respectively. The effective income tax rate from continuing operations for the period ended ~~March 31,~~September 30, 2020 was impacted by ~~provisions~~various discrete items including the tax impact of the ~~CARES Act. The Company recorded an income statement benefit of $12,538 related to~~United Kingdom Fruit business reserve, the ~~net operating loss carryback provision of~~enacted change in the CARES Act, net of a reserve under ASC 740-10, but excluding the indirect tax benefit of $2,800 related to discontinued operations. This benefit is primarily due to the Company's ability to realize net operating losses at 35% (previous FederalUnited Kingdom's corporate income tax ~~rate), while~~rate to 19% and a legal entity reorganization completed during the ~~deferred tax asset was established at 21% (current Federal income tax rate). The~~quarter ended September 30, 2020. In addition, the effective income tax rates from continuing operations for ~~all periods~~the three months ended September 30, 2020 and 2019 were impacted by provisions in the Tax Cuts and Jobs Act (the "Tax Act"), primarily related to Global Intangible Low Taxed Income ("GILTI") and limitations on the deductibility of executive compensation. The effective income tax rates in each period were also impacted by the geographical mix of ~~earnings.~~earnings and state valuation allowance.

In August 2020, the Company received $25,033 including $1,227 of interest from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") refund claim filed in July 2020. The remaining receivable balance of $28,694 is included in Prepaid expenses and other current assets as of September 30, 2020.

The income tax benefit from discontinued operations was $11,331 for the three months ended September 30, 2020, while the income tax expense from discontinued operations was ~~a benefit of $1,624 and expense of $11,848~~$15,307 for the three ~~and nine~~ months ended ~~March 31, 2020, respectively, while the~~September 30, 2019. The benefit for income tax ~~benefit from discontinued operations was $21,244 and $48,788~~ for the three ~~and nine~~ months ended ~~March 31, 2019, respectively.~~September 30, 2020 was impacted by a legal entity reorganization allowing the Company to reduce the U.S. GILTI tax impact on the sale of the Tilda entities. The expense ~~for~~from income taxes for the ~~nine~~three months ended ~~March 31, 2020~~September 30, 2019 was impacted by ~~$14,500~~$16,500 of tax related to the tax gain on the sale of the Tilda Group Entities. The benefit from income taxes for the three and nine months ended March 31, 2019 includes the reversal of the $12,250 deferred tax liability previously recorded related to Hain Pure Protein being classified as held-for-sale. Additionally, the three and nine month tax benefit is impacted by the tax effect of current period book losses as well as deferred tax benefit arising from asset impairment charges.entities.

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~~12.~~11. ACCUMULATED OTHER ~~COMPREHENSIVE (LOSS) INCOME~~COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive ~~(loss) income:~~loss:


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019		2020		2019			2020		2019
Foreign currency translation adjustments:	Foreign currency translation adjustments:									Foreign currency translation adjustments:
Other comprehensive (loss) income before reclassifications ⁽¹⁾		$	(52,315)	$	20,934	$	(42,602)	$	(20,533)
Other comprehensive income (loss) before reclassifications (1)										Other comprehensive income (loss) before reclassifications (1)	$	32,776	$	(38,942)
Amounts reclassified into income ⁽²⁾	Amounts reclassified into income ⁽²⁾	—		—		95,120		—		Amounts reclassified into income (2)	1,181		95,120
Deferred gains (losses) on cash flow hedging instruments:	Deferred gains (losses) on cash flow hedging instruments:									Deferred gains (losses) on cash flow hedging instruments:
Other comprehensive income (loss) before reclassifications		—		(42)		—		(42)
Other comprehensive loss before reclassifications										Other comprehensive loss before reclassifications	(883)		0
Amounts reclassified into income ⁽³⁾	Amounts reclassified into income ⁽³⁾	109		—		83		—		Amounts reclassified into income (3)	923		(68)

Net change in accumulated other comprehensive (loss) income		$	(52,206)	$	20,892	$	52,601	$	(20,575)
Deferred gains (losses) on net investment hedging instruments:										Deferred gains (losses) on net investment hedging instruments:
Other comprehensive loss before reclassifications										Other comprehensive loss before reclassifications	(2,890)		0
Amounts reclassified into income (3)										Amounts reclassified into income (3)	(102)		0
Net change in accumulated other comprehensive loss										Net change in accumulated other comprehensive loss	$	31,005	$	56,110

(1) Foreign currency translation adjustments included intra-entity foreign currency transactions that were of a long-term investment nature and were net losses of ~~$453~~$0 and ~~$403~~$863 for the three months ended ~~March 31, 2020 and 2019, respectively, and net losses of $703 and $875 for the nine months ended March 31,~~September 30, 2020 and 2019, respectively.

(2) Foreign currency translation gains or losses of foreign subsidiaries related to divested businesses are reclassified into income once the liquidation of the respective foreign subsidiaries is substantially complete. During the three months ended September 30, 2020, the Company reclassified $1,181 of translation losses from accumulated comprehensive loss to Other (income) expense, net on the Consolidated Statement of Operations. At the completion of the sale of Tilda, the Company reclassified $95,120 of translation losses from accumulated comprehensive loss to the Company’s results of discontinued operations.

(3) ~~Amounts~~See Note 15, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains (losses) on cash flow hedging instruments ~~are~~ recorded ~~in Cost of sales~~ in the Consolidated Statements of Operations ~~and, before taxes, were $134 and $108~~ in the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020 ~~respectively. There were 0 amounts reclassified into income in the three~~ and ~~nine months ended March 31,~~ 2019.

~~13.~~12. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

The Company has 1 stockholder approved plan, the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the "2002 Plan"), under which the Company’s officers, senior management, other key employees, consultants and directors may be granted ~~options to purchase the Company’s common stock or other forms of~~ equity-based awards. The Company also grants shares under its 2019 Equity Inducement Award Program (the "2019 Inducement Program") to induce selected individuals to become employees of the Company. The 2002 Plan and 2019 Inducement Program are collectively referred to as the "Stock Award Plans". In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI ~~Plan”). As of March 31, 2020, the LTI Plan consisted of 2 performance-based long-term incentive plans (the “2018-2020 LTIP” and “2019-2021 LTIP”~~Program”) that ~~provide~~provides for performance and market equity awards that can be earned over defined performance periods. ~~As of March 31, 2019, the Company maintained the 2017-2019 LTIP in addition to a 2016-2018 LTIP that provided for performance equity awards that could have been earned over a~~ ~~three-year performance period.~~ The Company's plans are described in Note ~~14,~~15, Stock-Based Compensation and Incentive Performance Plans, in the Notes to the Consolidated Financial Statements in the Form 10-K.

Compensation cost and related income tax benefits recognized in the Consolidated Statements of Operations for stock-based compensation plans were as follows:


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019		2020		2019			2020		2019
Selling, general and administrative expense	Selling, general and administrative expense	$	3,761	$	3,927	$	9,581	$	5,489	Selling, general and administrative expense	$	4,367	$	2,737
Chief Executive Officer Succession Plan expense, net		—		—		—		429

Discontinued operations	Discontinued operations	—		16		544		71		Discontinued operations	0		544
Total compensation cost recognized for stock-based compensation plans	Total compensation cost recognized for stock-based compensation plans	$	3,761	$	3,943	$	10,125	$	5,989	Total compensation cost recognized for stock-based compensation plans	$	4,367	$	3,281
Related income tax benefit	Related income tax benefit	$	630	$	470	$	1,300	$	765	Related income tax benefit	$	807	$	373

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During the nine months ended March 31, 2019, the Company determined that the achievement of the adjusted operating income goals required to be met for Section 162(m) funding were not probable and therefore no awards would be paid or vested pursuant to the 2016-2018 LTIP and 2017-2019 LTIP. As such, in the nine months ended March 31, 2019, the Company recorded a benefit of $9,478 associated with the reversal of previously accrued amounts for awards under these plans that were dependent on the achievement of pre-determined performance measures. Of this amount, $5,065 was recorded in Chief Executive Officer Succession Plan expense, net, and $4,413 was recorded to Selling, general and administration expense (including $1,867 of stock-based compensation expense).

Restricted Stock

Awards of restricted stock are either restricted stock awards ("RSAs") or restricted stock units ("RSUs") that are issued at no cost to the recipient. Performance-based or market-based RSUs are issued in the form of performance share units ("PSUs"). A summary of the restricted stock activity (including all RSAs, RSUs and ~~restricted share unit activity~~PSUs) for the ~~nine~~three months ended ~~March 31,~~September 30, 2020 is as follows:


		Number of Shares and Units	Weighted Average Grant Date Fair Value (per share)			Number of Shares and Units	Weighted Average Grant Date Fair Value (per share)
Non-vested restricted stock, restricted share units, and performance units outstanding at June 30, 2019		2,729	$	12.94
Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2020					Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2020	2,049	$	15.85
Granted	Granted	969	$	17.16	Granted	133	$	33.14
Vested	Vested	(257)	$	22.77	Vested	(44)	$	24.11
Forfeited	Forfeited	(1,249)	$	8.41	Forfeited	(49)	$	14.18
Non-vested restricted stock, restricted share units, and performance units outstanding at March 31, 2020		2,192	$	15.82
Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2020					Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2020	2,089	$	16.79

At ~~March 31,~~September 30, 2020 and June 30, ~~2019,~~2020, the table above includes a total of ~~1,048~~1,321 and ~~1,964~~1,384 shares (including an inducement grant of 350 shares made to our CEO as previously disclosed), respectively, that represent the target number of shares that may be earned ~~under non-vested performance equity awards~~based on pre-defined market conditions that are eligible to vest atranging from 0 to 300% of ~~target depending on~~target. Vested shares during the ~~achievement of pre-defined performance criteria. Additionally, at March 31, 2020 and June 30, 2019, the table above includes~~current period include a total of ~~29 and 42~~20 shares ~~respectively,~~under the 2018-2020 LTIP that ~~represent the target number of shares that may be earned under non-vested performance equity awards that are eligible to vest~~actually vested at 150% of target ~~depending~~based on ~~the~~ achievement of ~~pre-defined performance criteria.~~the maximum relative TSR target.

Nine Months Ended March 31,
2020 2019
Fair value of restricted stock and restricted share units granted $ 16,634 $ 24,734
Fair value of shares vested $ 5,848 $ 7,725
Tax (benefit) expense recognized from restricted shares vesting $ (102) $ 3,331


	Three Months Ended September 30,
	2020		2019
Fair value of RSAs, RSUs and PSUs granted	$	4,398	$	59
Fair value of shares vested	$	1,056	$	770
Tax benefit recognized from restricted shares vesting	$	152	$	59

At ~~March 31,~~September 30, 2020, there was ~~$23,325~~$18,677 of unrecognized stock-based compensation expense ~~net of estimated forfeitures,~~ related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of ~~2.0~~2.3 years.

~~Stock Options~~

~~A summary of the stock option activity for the nine months ended March 31, 2020 is as follows:~~

Number of Options
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Life (years)
Aggregate
Intrinsic Value
Options outstanding and exercisable at June 30, 2019 122 $ 2.26
Exercised — —
Options outstanding and exercisable at March 31, 2020 122 $ 2.26 11.3 $ 2,891

~~At March 31, 2020, there was 0 unrecognized compensation expense related to stock option awards.~~

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~~14.~~13. INVESTMENTS

On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Chop't Holdings, LLC (“Chop’t”). Chop’tdevelops and operates fast-casual, fresh salad restaurants in the Northeast and Mid-Atlantic United States. The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Chop’t. At ~~March 31,~~September 30, 2020 and June 30, ~~2019,~~2020, the carrying value of the Company’s investment in Chop’t was ~~$13,755~~$12,465 and ~~$14,632,~~$12,793, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds the following investments: (a) Hutchison Hain Organic Holdings Limited (“HHO”) with Hutchison China Meditech Ltd., a joint venture accounted for under the equity method of accounting, (b) Hain Future Natural Products Private Ltd. with Future Consumer Ltd, a joint venture accounted for under the equity method of accounting, and (c) Yeo Hiap Seng Limited, for which the Company holds a less than 1% equity ownership interest. The carrying value of these combined investments was $5,434 and $4,646 as of September 30, 2020 and June 30, 2020, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

~~15.~~

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14. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table presents assets and liabilities measured at fair value on a recurring basis as of ~~March 31,~~September 30, 2020:


		Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:	Assets:									Assets:

Forward foreign currency contracts		992		—		992		—
Cash equivalents										Cash equivalents	$	7	$	7	$	0	$	0
Derivative financial instruments										Derivative financial instruments	885		0		885		0
Equity investment	Equity investment	479		479		—		—		Equity investment	512		512		0		0
Total	Total	$	1,471	$	479	$	992	$	—	Total	$	1,404	$	519	$	885	$	0
Liabilities:	Liabilities:									Liabilities:
Forward foreign currency contracts		$	122	$	—	$	122	$	—
Derivative financial instruments										Derivative financial instruments	$	11,232	$	0	$	11,232	$	0
Total	Total	$	122	$	—	$	122	$	—	Total	$	11,232	$	0	$	11,232	$	0

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2019:~~2020:


		Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:	Assets:									Assets:
Cash equivalents	Cash equivalents	$	44	$	44	$	—	$	—	Cash equivalents	$	7	$	7	$	0	$	0
Forward foreign currency contracts		626		—		626		—
Derivative financial instruments										Derivative financial instruments	1,014		0		1,014		0
Equity investment	Equity investment	621		621		—		—		Equity investment	562		562		0		0
Total	Total	$	1,291	$	665	$	626	$	—	Total	$	1,583	$	569	$	1,014	$	0
Liabilities:	Liabilities:									Liabilities:
Forward foreign currency contracts		$	103	$	—	$	103	$	—
Derivative financial instruments										Derivative financial instruments	$	6,405	$	0	$	6,405	$	0

Total	Total	$	103	$	—	$	103	$	—	Total	$	6,405	$	0	$	6,405	$	0

The equity investment consists of the Company’s less than 1% investment in Yeo Hiap Seng Limited, a food and beverage manufacturer and distributor based in Singapore. Fair value is measured using the market approach based on quoted prices. The Company utilizes the income approach to measure fair value for its foreign currency forward contracts. The income approach uses pricing models that rely on market observable inputs such as yield curves, currency exchange rates and forward prices.

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At March 31, 2020 and June 30, 2019, the probability of payment related to existing contingent consideration arrangements was remote. Accordingly, no liability was recorded on the Consolidated Balance Sheets in either period.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the ~~nine~~three months ended ~~March 31,~~September 30, 2020 ~~and March 31,~~or 2019.

The carrying amount of cash and cash equivalents, accounts receivable, net, accounts payable and certain accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these financial instruments. The Company’s debt approximates fair value due to the debt bearing fluctuating market interest rates ~~(See~~(see Note ~~10,~~9, Debt and Borrowings).

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In addition to the instruments named above, the Company makes fair value measurements in connection with its assets and liabilities classified as held for sale related to the Fruit and Danival businesses as of September 30, 2020 and June 30, 2020, respectively, as these balances represent the estimated fair value, less costs to sell. The Company also makes fair value measurements in connection with its interim and annual goodwill and tradename impairment testing. These measurements fall into Level 3 of the fair value hierarchy (See Note 9,8, Goodwill and Other Intangible Assets).

Derivative Instruments

The Company uses interest rate swaps to manage its interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency exchange rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

In accordance with the provisions of ASC 820, Fair Value Measurements, the Company incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the Company’s derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the derivatives held as of September 30, 2020 and June 30, 2020 were classified as Level 2 of the fair value hierarchy.

The fair value estimates presented in the fair value hierarchy tables above are based on information available to management as of September 30, 2020 and June 30, 2020. These estimates are not necessarily indicative of the amounts we could ultimately realize.

15. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk primarily ~~has~~by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings.

Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S. Dollar.

Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes.

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Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the three months ended September 30, 2020, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. During the remaining nine months of fiscal 2021, the Company estimates that an additional $211 will be reclassified as an increase to interest expense.

As of September 30, 2020, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:


Interest Rate Derivative	Number of Instruments	Notional Amount
Interest Rate Swap	4	$230,000

Cash Flow Hedges of Foreign Exchange Risk

The Company is exposed to fluctuations in various foreign currencies against its functional currency, the U.S. Dollar. The Company uses foreign currency derivatives including cross-currency swaps to manage its exposure to fluctuations in the USD-EUR exchange rates. Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts, both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the instrument. The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates. The Company designates these derivatives as cash flow hedges of foreign exchange risks.

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in Accumulated other comprehensive loss and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the remaining nine months of fiscal 2021, the Company estimates that an additional $123 relating to cross-currency swaps will be reclassified as an increase to interest income.

As of September 30, 2020, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks:


Foreign Currency Derivative	Number of Instruments	Notional Sold	Notional Purchased
Cross-currency swap	1	€24,700	$26,775

Net Investment Hedges

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities and their exposure to the Euro. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Europe. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in U.S. Dollars for their fair value at or close to their settlement date. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange ~~rates relating~~for the Company making foreign-currency fixed-rate payments over the life of the agreement.

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For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in Accumulated other comprehensive loss as part of the cumulative translation adjustment. Amounts are reclassified out of Accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated.

As of September 30, 2020, the Company had the following outstanding foreign currency derivatives that were used to ~~certain anticipated cash flows~~hedge its net investments in foreign operations:


Foreign Currency Derivative	Number of Instruments	Notional Sold	Notional Purchased
Cross-currency swap	2	€76,969	$83,225

Non-Designated Hedges

Derivatives not designated as hedges are not speculative and ~~firm commitments from its international operations.~~ are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements and/or the Company has not elected to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

As of September 30, 2020, the Company had outstanding derivatives that were not designated as hedges in qualifying hedging relationships consisting of foreign currency forward contracts with a notional amount of $24,734.

The ~~Company may enter into certain~~following table presents the fair value of the Company’s derivative financial instruments ~~when available~~as well as their classification on ~~a cost-effective basis, to manage such risk. Derivative financial instruments are not used for speculative purposes.~~ the Consolidated Balance Sheet as of September 30, 2020:


	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps	Prepaid expenses and other current assets	$	0	Accrued expenses and other current liabilities / Other noncurrent liabilities	$	737
Cross-currency swaps	Prepaid expenses and other current assets	674		Other noncurrent liabilities	10,407

Total derivatives designated as hedging instruments		674			11,144

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	211		Accrued expenses and other current liabilities	88
Total derivative instruments		$	885		$	11,232

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The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of June 30, 2020:


	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps	Prepaid expenses and other current assets	$	0	Accrued expenses and other current liabilities / Other noncurrent liabilities	$	856
Cross-currency swaps	Prepaid expenses and other current assets	746		Other noncurrent liabilities	5,475
Foreign currency forward contracts	Prepaid expenses and other current assets	75		Other noncurrent liabilities	0
Total derivatives designated as hedging instruments		821			6,331

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	193		Accrued expenses and other current liabilities	74
Total derivative instruments		$	1,014		$	6,405

The following table presents the pre-tax effect of cash flow hedge accounting on Accumulated other comprehensive loss as of September 30, 2020 and 2019:


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivatives				Location of Gain (Loss) Reclassified from Accumulated OCL into Income	Amount of Gain (Loss) Reclassified from Accumulated OCL into Income
	Three Months Ended September 30,					Three Months Ended September 30,
	2020		2019			2020		2019
Interest rate swaps	$	61	$	0	Interest and other financing expense, net	$	(58)	$	0
Cross-currency swaps	(1,177)		0		Interest and other financing expense, net / Other expense (income), net	(1,183)		0
Foreign currency forward contracts	(2)		(6)		Cost of sales	73		78
Total	$	(1,118)	$	(6)		$	(1,168)	$	78

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The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations as of September 30, 2020 and 2019:


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Three Months Ended September 30, 2020						Three Months Ended September 30, 2019
				Cost of sales		Interest and other financing expense, net		Other expense (income), net		Cost of sales		Interest and other financing expense, net		Other expense (income), net
The effects of cash flow hedging:
	Gain (loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain (loss) reclassified from accumulated OCL into income	$	0	$	(58)	$	0	$	0	$	0	$	0

		Cross-currency swaps
			Amount of gain (loss) reclassified from accumulated OCL into income	$	—	$	41	$	(1,224)	$	—	$	—	$	—

		Foreign currency forward contracts
			Amount of gain (loss) reclassified from accumulated OCL into income	$	73	$	—	$	—	$	78	$	—	$	—

The following table presents the pre-tax effect of the Company’s net investment hedges on Accumulated other comprehensive loss and the Consolidated Statements of Operations as of September 30, 2020 and 2019:


Derivatives in Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivatives				Location of Gain (Loss) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing)
	Three Months Ended September 30,					Three Months Ended September 30,
	2020		2019			2020		2019
Cross-currency swaps	$	(3,658)	$	0	Interest and other financing expense, net	$	129	$	0

The following table presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements Operations as of September 30, 2020 and 2019:


Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivatives
		Three Months Ended September 30,
		2020		2019
Foreign currency forward contracts	Other expense (income), net	$	124	$	(169)

Credit-Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision providing that upon certain defaults by the Company on any of its indebtedness, the Company could also be declared in default on its derivative obligations.

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16. TERMINATION BENEFITS RELATED TO PRODUCTIVITY AND TRANSFORMATION INITIATIVES

As a part of the ongoing productivity and transformation initiatives related to the Company’s strategic objective to expand profit margins and cash flow, the Company initiated a reduction in workforce at targeted locations in the United States as well as at certain locations internationally. The reduction in workforce associated with these ~~derivatives~~initiatives are expected to result in charges throughout fiscal 2021.

The following table displays the termination benefits and personnel realignment activities and liability balances relating to the reduction in workforce for the period ended as of September 30, 2020:


	Balance at June 30, 2020		Charges (reversals)		Amounts Paid		Foreign Currency Translation & Other Adjustments		Balance at September 30, 2020
Termination benefits and personnel realignment	$	11,541	$	352	$	(4,735)	$	100	$	7,258

The liability balance as of September 30, 2020 and June 30, 2020 is included ~~in Prepaid expenses and other current assets and~~within Accrued expenses and other current liabilities inon the Company’s Consolidated Balance Sheets. For derivative instruments that qualify as hedges of probable forecasted cash flows, the effective portion of changes in fair value is temporarily reported in Accumulated other comprehensive loss and recognized in earnings when the hedged item affects earnings. Fair value hedges and derivative instruments not designated as hedges are marked-to-market each reporting period with any unrealized gains or losses recognized in earnings.

Derivative instruments designated as hedges at inception are measured for effectiveness at inception and on a quarterly basis. These assessments determine whether derivatives designated as qualifying hedges continue to be highly effective in offsetting changes in the cash flows of hedged items. Any ineffective portion of change in fair value is not deferred in Accumulated other comprehensive loss and is included in current period earnings. The Company will discontinue cash flow hedge accounting when the forecasted transaction is no longer probable of occurring on the originally forecasted date or when the hedge is no longer effective. There were 0 discontinued foreign exchange hedges for the three and nine months ended March 31, 2020 and March 31, 2019.

The notional amount of cash flow hedges at March 31, 2020 and June 30, 2019 was $6,051 and $2,275, respectively. The fair value of cash flow hedges at March 31, 2020 and June 30, 2019 was $257 and $83 of net assets, respectively.

The notional amounts of foreign currency exchange contracts not designated as hedges at March 31, 2020 and June 30, 2019 were $45,768 and $41,845, respectively. The fair values of foreign currency exchange contracts not designated as hedges at March 31, 2020 and June 30, 2019 were $613 and $440 of net assets, respectively.

Gains and losses related to non-designated foreign currency exchange contracts are recorded in the Company’s Consolidated Statements of Operations based upon the nature of the underlying hedged transaction and were not material for the three and nine months ended March 31, 2020 and March 31, 2019.

~~16.~~17. COMMITMENTS AND CONTINGENCIES

Securities Class Actions Filed in Federal Court

On August 17, 2016, 3 securities class action complaints were filed in the Eastern District of New York against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The 3 complaints are: (1) Flora v. The Hain Celestial Group, Inc., et al. (the “Flora Complaint”); (2) Lynn v. The Hain Celestial Group, Inc., et al. (the “Lynn Complaint”); and (3) Spadola v. The Hain Celestial Group, Inc., et al. (the “Spadola Complaint” and, together with the Flora and Lynn Complaints, the “Securities Complaints”). On June 5, 2017, the court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel. Pursuant to this order, the Securities Complaints were consolidated under the caption In re The Hain Celestial Group, Inc. Securities Litigation (the “Consolidated Securities Action”), and Rosewood Funeral Home and Salamon Gimpel were appointed as Co-Lead Plaintiffs. On June 21, 2017, the Company received notice that plaintiff Spadola voluntarily dismissed his claims without prejudice to his ability to participate in the Consolidated Securities Action as an absent class member. The Co-Lead Plaintiffs in the Consolidated

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Securities Action filed a Consolidated Amended Complaint on August 4, 2017 and a Corrected Consolidated Amended Complaint on September 7, 2017 on behalf of a purported class consisting of all persons who purchased or otherwise acquired Hain Celestial securities between November 5, 2013 and February 10, 2017 (the “Amended Complaint”). The Amended Complaint named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead. Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its ~~current and~~ former officers and asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Amended Complaint, including materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. Co-Lead Plaintiffs filed an opposition on August 5, 2019, and Defendants submitted a reply on September 3, 2019. On April 6, 2020, the Court granted Defendants' motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs filed a notice of appeal on May 5, 2020 indicating their intent to appeal the Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit.

~~Stockholder Derivative Complaints Filed in State Court~~

On September 16, 2016, a stockholder derivative complaint, Paperny v. Heyer, et al. (the “Paperny Complaint”), was filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers of the Company alleging breach of fiduciary duty, unjust enrichment, lack of oversight and corporate waste. On December 2, 2016 and December 29, 2016, 2 additional stockholder derivative complaints were filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers under the captions ~~Scarola v. Simon~~ ~~(the “Scarola Complaint”) and~~ ~~Shakir v. Simon~~ (the “Shakir Complaint” and, together with the Paperny Complaint and the Scarola Complaint, the “Derivative Complaints”), respectively. Both the Scarola Complaint and the Shakir Complaint alleged breach of fiduciary duty, lack of oversight and unjust enrichment. On February 16, 2017, the parties for the Derivative Complaints entered into a stipulation consolidating the matters under the caption ~~In re The Hain Celestial Group~~ (the “Consolidated Derivative Action”) in New York State Supreme Court in Nassau County, ordering the Shakir Complaint as the operative complaint. On November 2, 2017, the parties agreed to stay the Consolidated Derivative Action. Co-Lead Plaintiffs requested leave to file an amended consolidated complaint, and on January 14, 2019, the Court partially lifted the stay, ordering Co-Lead Plaintiffs to file their amended complaint by March 7, 2019. Co-Lead Plaintiffs filed a Verified Amended Shareholder Derivative Complaint on March 7, 2019. The Court continued the stay pending a decision on Defendants’ motion to dismiss in the Consolidated Securities Action (referenced above). After the Court in the Consolidated Securities Action dismissed the Amended Complaint, the Court in the Consolidated Derivative Action ordered Co-Lead Plaintiffs to file a second amended complaint no later than July 8, 2019. Co-Lead Plaintiffs filed a Verified Second Amended Shareholder Derivative Complaint on July 8, 2019 (the “Second Amended Derivative Complaint”). Defendants moved to dismiss the Second Amended Derivative Complainttheir appellate brief on August ~~7, 2019. Co-Lead Plaintiffs filed an~~18, 2020. Defendants' opposition ~~to Defendants’ motion to dismiss, and Defendants submitted a reply~~brief is due on ~~September 20, 2019. This motion is fully briefed, and the parties await a decision.~~November 17, 2020.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

On April 19, 2017 and April 26, 2017, 2 class action and stockholder derivative complaints were filed in the Eastern District of New York against the former Board of Directors and certain former officers of the Company under the captions Silva v. Simon, et al. (the “Silva Complaint”) and Barnes v. Simon, et al. (the “Barnes Complaint”), respectively. Both the Silva

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Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment.

On May 23, 2017, an additional stockholder filed a complaint under seal in the Eastern District of New York against the former Board of Directors and certain former officers of the Company. The complaint alleged that the Company’s former directors and certain former officers made materially false and misleading statements in press releases and SEC filings regarding the Company’s business, prospects and financial results. The complaint also alleged that the Company violated its by-laws and Delaware law by failing to hold its 2016 Annual Stockholders Meeting and includes claims for breach of fiduciary duty, unjust enrichment and corporate waste. On August 9, 2017, the Court granted an order to unseal this case and reveal Gary Merenstein as the plaintiff (the “Merenstein Complaint”).

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On August 10, 2017, the court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”) and to appoint Robbins Arroyo LLP and Scott+Scott as Co-Lead Counsel, with the Law Offices of Thomas G. Amon as Liaison Counsel for Plaintiffs. On September 14, 2017, a related complaint was filed under the caption Oliver v. Berke, et al. (the “Oliver Complaint”), and on October 6, 2017, the Oliver Complaint was consolidated with the Consolidated Stockholder Class and Derivative Action. The Plaintiffs filed their consolidated amended complaint under seal on October 26, 2017. On December 20, 2017, the parties agreed to stay Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through and including 30 days after a decision was rendered on the motion to dismiss the Amended Complaint in the Consolidated Securities Action, described above.

On March 29, 2019, the Court in the Consolidated Securities Action granted Defendants’ motion, dismissing the Amended Complaint in its entirety, without prejudice to replead. Co-Lead Plaintiffs in the Consolidated Securities Action filed the Second Amended Complaint on May 6, 2019. The parties to the Consolidated Stockholder Class and Derivative Action agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through 30 days after a decision on Defendants' motion to dismiss the Second Amended Complaint in the Consolidated Securities Action.

On April 6, 2020, the Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice. Pursuant to the terms of the stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020.

On ~~April 28,~~July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action. On August 10, 2020, the Court ~~entered an~~vacated the briefing schedule on Defendants’ pending motion to dismiss in order ~~extending Defendants’~~to give the Board of Directors time to ~~respond~~consider the demand. On each of September 8 and October 8, 2020, the Court extended its stay of any applicable deadlines for 30 days to ~~June 9,~~give the Board of Directors additional time to complete its evaluation of the demand. On November 3, 2020, Plaintiffs were informed that the Board of Directors had finished investigating and resolved, among other things, that the demand should be rejected. On November 6, 2020, Plaintiffs and Defendants notified the Court that Plaintiffs are in the process of evaluating the rejection of the demand, seeking certain additional information and assessing next steps and requested that the Court extend the stay for an additional 30 days, to on or around December 7, 2020.

Other

In addition to the litigation described above, the Company is and may be a defendant in lawsuits from time to time in the normal course of business. While the results of litigation and claims cannot be predicted with certainty, the Company believes the reasonably possible losses of such matters, individually and in the aggregate, are not material. Additionally, the Company believes the probable final outcome of such matters will not have a material adverse effect on the Company’s consolidated results of operations, financial position, cash flows or liquidity.

~~17.~~18. SEGMENT INFORMATION

Prior to July 1, 2019, the Company’s operations were managed in 7 operating segments: the United States, United Kingdom, Tilda, Ella’s Kitchen UK, Europe, Canada and Hain Ventures. For segment reporting purposes, based on economic similarity as outlined within Accounting Standards Codification ("ASC")In accordance with ASC 280, Segment Reporting, the Company, ~~elected to combine the United Kingdom, Tilda and Ella’s Kitchen UK~~based on economic similarity, defines its operating segments ~~into 1 reportable segment known as United Kingdom. Additionally, the Canada, Europe and Hain Ventures operating segments were combined~~ as the ~~Rest of World reportable segment. Separately,~~following 5 segments: the United States, ~~operating segment comprised its own reportable segment.~~

Effective July 1, 2019, the Company reassessed its segment reporting structure due to changes in how the Company’s CODM assesses the Company’s performance and allocates resources as a result of a change in the Company’s strategy, which includes creating synergies among the Company’s United States and Canada businesses, as well as among the Company’s international businesses in the United Kingdom (Hain Daniels), Ella's Kitchen UK, Europe and ~~Europe. As a result,~~Canada. Similarly, under the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment. Additionally, the Europe operating segment, which was included in the Rest of World reportable segment, was combined with the United Kingdom reportable segment and renamed the International reportable segment. Accordingly,same guidance, the Company ~~now~~ operates under 2 reportable segments: North America and International.

Prior period segment information has been adjusted to reflect the Company’s new operating and reporting structure. Additionally, the Tilda operating segment was classified as discontinued operations as discussed in Note 5, ~~Discontinued Operations. Segment information presented herein excludes the results of Tilda for all periods presented.~~

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Net sales and operating income are the primary measures used by the Company’s ~~CODM~~chief operating decision maker ("CODM") to evaluate segment operating performance and to decide how to allocate resources to segments. The CODM is the Company’s CEO. Expenses related to certain centralized administration functions that are not specifically related to an operating segment are included in Corporate and Other. Corporate and Other expenses are comprised mainly of the compensation and related expenses of certain of the Company’s senior executive officers and other selected employees who perform duties related to the entire enterprise, as well as expenses for certain professional fees, facilities and other items which benefit the Company as a whole. Additionally, certain Productivity and transformation costs are included in Corporate and Other. Expenses that are managed centrally, but can be attributed to a segment, such as employee benefits and certain facility costs, are allocated based on reasonable allocation methods. ~~The~~Information about total assets by segment is not disclosed because such information is not reported to or used by the Company’s CODM ~~does not use~~for purposes of assessing segment ~~asset information to allocate resources~~performance or ~~to assess performance of the segments and therefore, total segment assets have not been disclosed.~~allocating resources.

The following tables set forth financial information about each of the Company’s reportable segments. Transactions between reportable segments were insignificant for all periods presented.


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019		2020		2019			2020		2019
Net Sales:	Net Sales:									Net Sales:
North America	North America	$	320,440	$	314,321	$	872,834	$	911,086	North America	$	280,668	$	271,701
International	International	232,857		232,936		669,323		688,215		International	217,959		210,375

		$	553,297	$	547,257	$	1,542,157	$	1,599,301		$	498,627	$	482,076

Operating Income (Loss):	Operating Income (Loss):									Operating Income (Loss):
North America	North America	$	28,873	$	21,358	$	64,067	$	35,427	North America	$	33,256	$	15,132
International	International	18,660		19,883		40,666		40,696		International	(15,889)		9,107
		47,533		41,241		$	104,733	$	76,123		17,367		24,239
Corporate and Other ^(a)	Corporate and Other ^(a)	(28,398)		(22,249)		(73,952)		(105,975)		Corporate and Other (a)	(14,087)		(21,784)
		$	19,135	$	18,992	$	30,781	$	(29,852)		$	3,280	$	2,455

(a) In addition to general Corporate and Other expenses as described above, for the three months ended ~~March 31,~~September 30, 2020, Corporate and Other includes ~~$5,572~~$803 of Productivity and transformation ~~costs~~costs. For the three months ended September 30, 2019, Corporate and ~~tradename impairment~~Other includes $10,735 of ~~$7,650 ($2,118 related to North America; $5,532 related to International),~~Productivity and transformation costs, partially offset by a benefit of ~~$400~~$2,562 of proceeds from insurance claim. ~~For the three months ended March 31, 2019, Corporate and Other includes $455 of Chief Executive Officer Succession Plan expense, net and $7,562 of Productivity and transformation costs.~~

In addition to general Corporate and Other expenses as described above, for the nine months ended March 31, 2020, Corporate and Other includes $26,142 of Productivity and transformation costs and tradename impairment charges of $9,539 ($4,007 related to North America; $5,532 related to International), partially offset by a benefit of $2,962 of proceeds from insurance claim. For the nine months ended March 31, 2019, Corporate and Other includes $30,156 of Chief Executive Officer Succession Plan expense, net, $21,045 of Productivity and transformation costs, $4,334 of accounting review and remediation costs, net of insurance proceeds, and tradename impairment charges of $17,900 ($15,113 related to North America; $2,787 related to International).

The Company's net sales by product category are as follows:

Three Months Ended March 31, Nine Months Ended March 31,
2020 2019 2020 2019
Grocery $ 373,723 $ 388,687 $ 1,081,497 $ 1,151,781
Snacks 79,252 72,513 227,925 216,652
Tea 33,372 31,784 93,855 93,113
Personal Care 66,950 54,273 138,880 137,755
Total $ 553,297 $ 547,257 $ 1,542,157 $ 1,599,301

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	Three Months Ended September 30,
	2020		2019
Grocery	$	343,749	$	349,802

Snacks	81,159		76,399
Personal Care	48,982		34,437
Tea	24,737		21,438
Total	$	498,627	$	482,076

The Company’s net sales by geographic region, which are generally based on the location of the Company’s subsidiaries, were as follows:


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
		2020		2019		2020		2019			2020		2019
United States	United States	$	279,534	$	278,589	$	758,759	$	804,456	United States	$	239,717	$	236,334
United Kingdom	United Kingdom	169,024		179,679		501,619		537,438		United Kingdom	157,169		161,581
All Other	All Other	104,739		88,989		281,779		257,407		All Other	101,741		84,161
Total	Total	$	553,297	$	547,257	$	1,542,157	$	1,599,301	Total	$	498,627	$	482,076

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The Company’s long-lived assets, which primarily represent net property, plant and equipment, operating lease right-of-use assets and noncurrent other assets by geographic area were as follows:


		March 31, 2020		June 30, 2019			September 30, 2020		June 30, 2020
United States	United States	$	113,069	$	115,866	United States	$	150,573	$	146,633
United Kingdom	United Kingdom	137,517		132,876		United Kingdom	156,530		149,943
All Other	All Other	82,005		87,277		All Other	107,625		105,303
Total	Total	$	332,591	$	336,019	Total	$	414,728	$	401,879

19. RELATED PARTY TRANSACTIONS

The non-employee chair of the Company's Board of Directors is also the chair of the board of one of the Company’s suppliers, for which the Company incurs expenses in the ordinary course of business. The Company incurred expenses of $4,810 and $5,163 in the three months ended September 30, 2020 and 2019, respectively, to the supplier and affiliated entities.

A former member of the Company's Board of Directors is a partner in a law firm which provides legal services to the Company. During the time the director was a member of the Company's Board of Directors, the Company incurred expenses of $440 and $743 in the three months ended September 30, 2020 and 2019, respectively, to the law firm and affiliated entities. The director resigned from the Board in February 2020.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended ~~March 31,~~September 30, 2020 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019.~~2020. Forward looking statements in this Form 10-Q are qualified by the cautionary statement included in this Form 10-Q under the sub-heading “Cautionary Note Regarding Forward Looking Information” in the introduction of this Form 10-Q.

Overview

The Company manufactures, markets, distributes and sells organic and natural products under brand names ~~that are sold as “better-for-you” products,~~ providing consumers with the opportunity to lead A Healthier Way of ~~Life™~~Life®. Hain Celestial is a leader in many organic and natural products categories, with many recognized brands in the various market categories it serves, including ~~Almond Dream~~^®~~, Bearitos~~^®~~, Better Bean~~^®~~, BluePrint~~^®, Celestial Seasonings^®, Clarks™~~, Coconut Dream~~^®, Cully & Sully^®, ~~Danival~~^Dream®, ~~DeBoles~~^®, Earth’s Best^®, Ella’s Kitchen^®, Farmhouse Fare™, Frank Cooper’s^®, ~~Gale’s~~GG UniqueFiber^®, Gale's®, Garden of ~~Eatin’~~Eatin'^®~~, GG UniqueFiber~~^®, Hain Pure Foods^®, Hartley’s^®, Health Valley^®, Imagine^®~~, Johnson’s Juice Co.™~~, Joya^®, Lima^®, Linda McCartney^® (under license), MaraNatha^®~~, Mary Berry (under license)~~, Natumi^®, New Covent Garden Soup Co.^®, Orchard House^®~~, Rice Dream~~^®, Robertson’s^®, Sensible Portions^®, Spectrum^®~~Organics, Soy Dream~~^®, Sun-Pat^®, Sunripe^®, Terra^®, The Greek Gods^®, ~~Walnut Acres~~^®William’s™, Yorkshire Provender^®, and Yves Veggie Cuisine^®~~and William’s™~~. The Company’s personal care products are marketed under the Alba Botanica^®, Avalon Organics^®, Earth’s Best^®, JASON^®, Live Clean^®, One Step® and Queen Helene^® brands.

AsIn addition, as part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within ~~our~~its core portfolio. ~~Accordingly,~~During fiscal 2019, for example, the Company divested ~~of all of~~ its ~~operations of the~~ Hain Pure Protein reportable segment and ~~WestSoy®~~its WestSoy® tofu, seitan and tempeh ~~businesses~~businesses. In fiscal 2020, the Company divested its Tilda business and its Arrowhead Mills®, SunSpire®, Europe's Best®, Casbah®, Rudi’s Gluten-Free Bakery™, Rudi’s Organic Bakery® and Fountain of Truth™ brands. More recently, the Company divested its Danival® business in July 2020. Additionally, in the ~~United States in~~first quarter of fiscal ~~2019,~~2021, the ~~entities comprising its Tilda operating segment and certain other assets~~Company began to actively market the sale of the ~~Tilda~~United Kingdom's fruit business, the Orchard House® Foods Limited business and associated brands, and thus, its assets and liabilities are classified as held for sale in ~~August 2019, its Arrowhead Mills®~~the Company's Consolidated Balance Sheet as of September 30, 2020. See Note 4, Assets Held for Sale and ~~SunSpire® brands~~ Discontinued Operations, in ~~October 2019,~~the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for additional information and ~~its Europe's Best® and Casbah® brands in March 2020.~~discussion of this planned divestiture.

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COVID-19

The COVID-19 pandemic ~~has created~~continues to create challenging and unprecedented conditions, and we are committed to supporting the global response to the crisis. We are proud of our employees who are giving extraordinary effort under difficult circumstances to ensure that we can supply the products our consumers depend on. We ~~are~~have been pleased with our preparation and efforts through the

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~~early stages of the~~ pandemic and we believe we are well positioned for the future as we continue to navigate the crisis and prepare for an eventual return to a more normal operating environment. WeTo date, we have successfully implemented contingency plans overseen by crisis management teams to monitor the evolving needs of our business. While we have managed the pandemic well with minimal disruption to our business thus far, the impact of the pandemic on our future consolidated results of operations is uncertain.

~~We discuss the actual and potential impact of the COVID-19 pandemic on our business below as well as in Part II, Item 1A,~~ ~~Risk Factors~~ ~~of this Form 10-Q.~~

Employee and Consumer Health and Safety Precautions

From the outset of the pandemic, our first priority has been the well-being of our employees and consumers. We were early adopters of guidance from global health authorities for preventing the spread of COVID-19, and we have consistently met or exceeded government guidelines for addressing the health and safety of our employees, including global travel restrictions, prohibitions against visitors, social distancing requirements, the use of thermal temperature scanners, and the provision of personal protective equipment to our employees. We have also enabled the use of new technology to allow many of our office-based employees to work from home effectively. While these important actions and initiatives have led to some increased costs, the overall costs have not been material to our financial results and have been more than offset by the overall increase in our net sales due to increased consumer demand.

Manufacturing Facilities and Supply Chain Challenges

We have experienced temporary disruptions at certain of our manufacturing facilities due to an abundance of caution and our early adoption of best practices for addressing instances of an employee contracting COVID-19. We are proud of our efforts to ensure the health and safety of our employees and consumers, and these temporary disruptions have not had a material impact on our operations to date. We continue to monitor and comply with all applicable government orders, as ~~many~~some of the jurisdictions in which we do business begin to ~~transition to the next phase of re-opening~~introduce new lockdowns and ~~a more normal operating environment.~~restrictions.

We ~~are facing, and will continue to~~may face ~~significant~~additional operational challenges in manufacturing our products and making them available to customers and consumers as a result of the COVID-19 pandemic. Shelter-in-place and social distancing behaviors, which are being mandated or encouraged by governments and practiced by businesses and individuals, create challenges for our manufacturing employees as well as for third parties on which we rely to make our products available to consumers. These third parties include our suppliers, contract manufacturers, distributors, logistics providers and other business partners, as well as the retailers that ultimately sell our products to consumers. We have experienced some increased volatility in the cost of ingredients and increased logistics-related costs to manage our supply chain through the pandemic. To date, these increased costs have not had a material impact on our financial results.

We believe our planning has us well positioned to continue to manage these supply chain challenges. ~~When certain European countries were among the first regions impacted by COVID-19, we learned the nature and scope of the resulting supply disruptions and how to prepare for them.~~ We ~~made the decision to identify~~identified our most important products and secondary sources of supply and manufacturing capabilities for those key products. We ~~acquired~~continue to acquire extra raw materials, supplemented our inventory levels and added temporary labor to support our extra manufacturing and health and safety initiatives. We also consolidated product shipping orders to more efficiently meet the increased customer and consumer demand. The framework for these supply chain measures remains in place to continue to meet any further surges in demand.

Consumer Demand

To date, shelter-in-place and social distancing behaviors have resulted in increased overall demand for our products, most notably in our grocery, snacks, tea and certain personal care product categories. Other product offerings, such as sun care products and the ~~food service~~fruit component of our ~~European fruit~~ business in the United Kingdom, have been adversely impacted due to changed consumer behavior and priorities.

While we ~~have~~ experienced a net increase in the overall demand for our products during the ~~early phases of the~~ COVID-19 pandemic, the continued duration of that increased demand environment is uncertain. Additionally, deteriorating economic ~~and political~~ conditions arising from the COVID-19 pandemic could adversely affect future demand for our products. Factors such as increased unemployment, decreases in disposable income and declines in consumer confidence could cause a decrease in demand for our overall product set, particularly higher priced products.

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Our Financial Position

~~The~~Overall, the COVID-19 pandemic has ~~not negatively impacted~~resulted in a net increase in overall demand for our ~~operations~~products. Accordingly, to ~~date. Accordingly, we do not expect~~date, our financial position ~~to be materially impacted by~~has benefited from the COVID-19 ~~pandemic.~~pandemic, albeit to a limited extent. We finance our operations primarily with the cash flows we generate from our operations and from borrowings available to us under our Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”). As of ~~March 31,~~September 30, 2020, we had ~~$628.1~~$702.3 million available under the Amended Credit Agreement.

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Business Priorities

While the current environment has caused us to delay certain planned innovation and productivity initiatives, our business strategy of simplifying our portfolio and reinvigorating profitable sales growth remains unchanged.

Financial Impact on Third Parties and Equity Investments

The economic fallout from the COVID-19 pandemic will impact third parties with which we conduct business, including our suppliers, contract manufacturers, distributors, logistics providers and other business partners. Deteriorating economic conditions could jeopardize the viability of some third parties and our business relationships with them and could cause us to incur losses or increased costs in our dealings with those third parties. We have taken measures to minimize the impact of hardships faced by individual business partners, including by identifying secondary sources of supply and manufacturing capabilities.

Productivity and Transformation Costs

Discontinued Operations

On August 27, 2019, the Company and Ebro Foods S.A. (the “Purchaser”) entered into, and consummated the transactions contemplated by, an agreement ~~titled, "Agreement~~ relating to the sale and purchase of the Tilda Group Entities and certain other assets" (the “Sale and Purchase Agreement”). The Company sold the entities comprising its Tilda operating segment and certain other assets of the Tilda business to the Purchaser for an aggregate price of $341.8 million.assets.

~~See Note 5,~~ Discontinued Operations, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for additional information on discontinued operations.

~~Change in Reportable Segments~~

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Historically, the Company had three reportable segments: United States, United Kingdom and Rest of World. Effective July 1, 2019, the Company reassessed its segment reporting structure due to changes in how the Company’s Chief Executive Officer (“CEO”), who is the chief operating decision maker, assesses the Company’s performance and allocates resources as a result of a change in the Company’s strategy, which includes creating synergies among the Company’s United States and Canada businesses, as well as among the Company’s international businesses in the United Kingdom and Europe. As a result, the Canada and Hain Ventures operating segment, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment. Additionally, the Europe operating segment, which was included in the Rest of World reportable segment, was combined with the United Kingdom reportable segment and renamed the International reportable segment. Accordingly, the Company now operates under two reportable segments: North America and International.

~~Prior period segment information contained herein has been adjusted to reflect the Company’s new operating and reporting structure.~~

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Comparison of Three Months Ended ~~March 31,~~September 30, 2020 to Three Months Ended ~~March 31,~~September 30, 2019

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended ~~March 31,~~September 30, 2020 and 2019 (amounts in thousands, other than percentages, which may not add due to rounding):


		Three Months Ended													Change in				Three Months Ended					Change in
		March 31, 2020					March 31, 2019						Dollars		Percentage	September 30, 2020			September 30, 2019			Dollars	Percentage
Net sales	Net sales	$	553,297	100.0%	$	547,257	100.0%	$	6,040	1.1%	Net sales	$	498,627	100.0%		$	482,076	100.0%	$	16,551	3.4%
Cost of sales	Cost of sales	420,902		76.1%	434,049		79.3%	(13,147)		(3.0)%	Cost of sales	379,463		76.1%		384,245		79.7%	(4,782)		(1.2)%
Gross profit	Gross profit	132,395		23.9%	113,208		20.7%	19,187		16.9%	Gross profit	119,164		23.9%		97,831		20.3%	21,333		21.8%
Selling, general and administrative expenses	Selling, general and administrative expenses	85,447		15.4%	81,088		14.8%	4,359		5.4%	Selling, general and administrative expenses	79,152		15.9%		80,680		16.7%	(1,528)		(1.9)%
Amortization of acquired intangibles		3,174		0.6%	3,265		0.6%	(91)		(2.8)%
Amortization of acquired intangible assets											Amortization of acquired intangible assets	2,433		0.5%		3,083		0.6%	(650)		(21.1)%
Productivity and transformation costs	Productivity and transformation costs	11,514		2.1%	9,408		1.7%	2,106		22.4%	Productivity and transformation costs	1,802		0.4%		14,175		2.9%	(12,373)		(87.3)%
Chief Executive Officer Succession Plan expense, net		—		—%	455		0.1%	(455)		*

Proceeds from insurance claim	Proceeds from insurance claim	(400)		(0.1)%	—		—%	(400)		*	Proceeds from insurance claim	—		—%		(2,562)		(0.5)%	2,562		*

Long-lived asset and intangibles impairment		13,525		2.4%	—		—%	13,525		*
Long-lived asset impairment											Long-lived asset impairment	32,497		6.5%		—		—%	32,497		*
Operating income	Operating income	19,135		3.5%	18,992		3.5%	143		0.8%	Operating income	3,280		0.7%		2,455		0.5%	825		33.6%
Interest and other financing expense, net	Interest and other financing expense, net	4,037		0.7%	5,994		1.1%	(1,957)		(32.6)%	Interest and other financing expense, net	2,453		0.5%		6,294		1.3%	(3,841)		(61.0)%
Other (income) expense, net	Other (income) expense, net	(260)		—%	1,067		0.2%	(1,327)		(124.4)%	Other (income) expense, net	(1,373)		(0.3)%		1,328		0.3%	(2,701)		*
Income from continuing operations before income taxes and equity in net loss of equity-method investees		15,358		2.8%	11,931		2.2%	3,427		28.7%
(Benefit) provision for income taxes		(10,242)		(1.9)%	2,943		0.5%	(13,185)		(448.0)%
Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees											Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees	2,200		0.4%		(5,167)		(1.1)%	7,367		*
Provision (benefit) for income taxes											Provision (benefit) for income taxes	12,962		2.6%		(531)		(0.1)%	13,493		*
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	564		—%	205		—%	359		175.1%	Equity in net loss of equity-method investees	19		—%		317		—%	(298)		(94.0)%
Net income from continuing operations		$	25,036	4.5%	$	8,783	1.6%	$	16,253	185.1%
Net loss from discontinued operations, net of tax		(697)		(0.1)%	(74,620)		(13.6)%	73,923		99.1%
Net loss from continuing operations											Net loss from continuing operations	$	(10,781)	(2.2)%		$	(4,953)	(1.0)%	$	(5,828)	*
Net income (loss) from discontinued operations, net of tax											Net income (loss) from discontinued operations, net of tax	11,266		2.3%		(102,068)		(21.2)%	113,334		*
Net income (loss)	Net income (loss)	$	24,339	4.4%	$	(65,837)	(12.0)%	$	90,176	137.0%	Net income (loss)	$	485	0.1%		$	(107,021)	(22.2)%	$	107,506	*

Adjusted EBITDA	Adjusted EBITDA	$	60,690	11.0%	$	49,137	9.0%	$	11,553	23.5%	Adjusted EBITDA	$	54,895	11.0%		$	32,090	6.7%	$	22,805	71.1%
Diluted net income per common share from continuing operations		$	0.24		$	0.08		$	0.16	200.0%
Diluted net loss per common share from discontinued operations		(0.01)			(0.72)			0.71		98.6%
Diluted net income (loss) per common share		$	0.23		$	(0.63)		$	0.86	136.5%
Diluted net loss per common share from continuing operations											Diluted net loss per common share from continuing operations	$	(0.11)			$	(0.05)		$	(0.06)	*
Diluted net income (loss) per common share from discontinued operations											Diluted net income (loss) per common share from discontinued operations	0.11				(0.98)			1.09		*
Diluted net loss per common share											Diluted net loss per common share	$	—			$	(1.03)		$	1.03	*

* Percentage is not meaningful due to one or two numbers being negative.

Net Sales

Net sales for the three months ended ~~March 31,~~September 30, 2020 were ~~$553.3~~$498.6 million, an increase of ~~$6.0~~$16.6 million, or ~~1.1%~~3.4%, as compared to ~~$547.3~~$482.1 million in the three months ended ~~March 31,~~September 30, 2019. On a constant currency basis, net sales increased approximately ~~2.1%~~1.5% from the prior year ~~quarter.~~quarter. Net sales on a constant currency basis increased in ~~both~~ the North America ~~and~~reportable segment, partially offset by a decrease in the International reportable ~~segments.~~segment. Further details of changes in net sales by segment and on a constant currency basis are provided below.

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Gross Profit

Gross profit for the three months ended ~~March 31,~~September 30, 2020 was ~~$132.4~~$119.2 million, an increase of ~~$19.2~~$21.3 million, or ~~16.9%~~21.8%, as compared to the prior year quarter. Gross profit margin was 23.9% of net sales, compared to ~~20.7%~~20.3% in the prior year quarter. The ~~increased profit margin~~increase was ~~favorably impacted~~driven by cost savings from the Company's productivity and transformation initiatives as well as favorable product mix in both our North America and ~~supply chain efficiencies primarily in the United States, partially offset by unfavorable foreign currency impacts of $1.3 million.~~International reportable segments.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were ~~$85.4~~$79.2 million for the three months ended ~~March 31,~~September 30, 2020, ~~an increase~~a decrease of ~~$4.4~~$1.5 million, or ~~5.4%~~1.9%, from ~~$81.1~~$80.7 million for the prior year ~~quarter.~~quarter. The ~~increase~~decrease was due to ~~increased variable compensation~~lower selling expenses incurred in fiscal year 2021 due to efficiencies gained from the Company's productivity and transformation initiatives, partially offset by an increase in marketing and advertising costs. Selling, general and ~~administrative~~administrative expenses as a percentage of net sales was ~~15.4%~~15.9% in the three months ended ~~March 31,~~September 30, 2020 compared to ~~14.8%~~16.7% in the prior year quarter, reflecting ~~an increase~~a decrease of 6080 basis points primarily attributable to the aforementioned items.

Amortization of Acquired ~~Intangibles~~Intangible Assets

Amortization of acquired intangibles was ~~$3.2~~$2.4 million for the three months ended ~~March 31,~~September 30, 2020, a decrease of ~~$0.1~~$0.7 million from ~~$3.3~~$3.1 million in the prior year quarter ~~primarily resulting~~. The decrease was due to finite-lived intangibles from ~~movements in foreign currency.~~historical acquisitions becoming fully amortized or impaired subsequent to the first quarter of fiscal 2020.

Productivity and Transformation Costs

Productivity and transformation costs were ~~$11.5~~$1.8 million for the three months ended ~~March 31,~~September 30, 2020, ~~an increase~~a decrease of ~~$2.1~~$12.4 million from ~~$9.4~~$14.2 million in the prior year quarter. The ~~increase~~decrease was primarily due to ~~increased~~higher consulting fees incurred in connection with the Company’s ~~ongoing~~productivity and transformation initiatives and ~~increased~~higher severance ~~costs.~~

~~Chief Executive Officer Succession Plan Expense, Net~~

~~Net~~ costs ~~and expenses associated with the Company’s former Chief Executive Officer Succession Plan were $0.5 million for the three months ended March 31, 2019. There were no comparable expenses~~ in the ~~three months ended March 31, 2020. See Note 3,~~ ~~Former Chief Executive Officer Succession Plan,~~prior year quarter and fewer comparable costs incurred in the ~~Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further discussion.~~current year quarter.

Proceeds from Insurance Claim

In July of 2019, the Company received $7.0 million as partial payment from an insurance claim relating to business disruption costs associated with a co-packer. Of this amount, $4.5 million was recognized in fiscal 2019 as it ~~relates~~related to reimbursement of costs already incurred, with the remaining $2.5 million recognized in the ~~nine~~three months ended ~~March 31, 2020. The Company recorded an additional $0.4 million of proceeds during the nine months ended March 31, 2020.~~September 30, 2019.

Long-lived Asset ~~and Intangibles~~ Impairment

During the three months ended ~~March 31,~~September 30, 2020, the Company ~~recorded~~recognized a pre-tax impairment charge of ~~$2.1~~$32.5 million related to ~~certain tradenames within~~the reserve recorded against the assets of the Company's ~~North America segment~~United Kingdom fruit business (see Note 4, Assets Held for Sale and ~~$5.5 million related~~Discontinued Operations, in the Notes to ~~certain tradenames within~~ the ~~Company's International segment. Additionally,~~Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q). There was no impairment charge recorded in the corresponding period in the three months ended March 31, 2020, the Company recorded a $5.9 million non-cash impairment charge primarily related to a write-down of certain machinery and equipment in the United States and Europe used to manufacture certain slow moving SKUs.September 30, 2019.

Operating Income

Operating income for the three months ended ~~March 31,~~September 30, 2020 was ~~$19.1~~$3.3 million compared to ~~$19.0~~$2.5 million in the prior year quarter as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled ~~$4.0~~$2.5 million for the three months ended ~~March 31,~~September 30, 2020, a decrease of ~~$2.0~~$3.8 million, or ~~32.6%~~61.0%, from ~~$6.0~~$6.3 million in the prior year quarter. The decrease resulted primarily from lower interest expense related to our revolving credit facility as a result of lower outstanding debt and lower variable interest rates. See Note ~~10,~~9, Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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Other (Income) Expense, Net

Other income, net totaled ~~$0.3~~$1.4 million for the three months ended ~~March 31,~~September 30, 2020, compared to expense of ~~$1.1~~$1.3 million in the prior year ~~quarter.~~quarter. The ~~increase~~change from expense to income was primarily attributable to ~~higher~~ net unrealized foreign currency gains in the first quarter of fiscal 2021 principally due to the effect of foreign currency movements on the remeasurement of foreign currency denominated ~~loans.~~loans compared to net unrealized foreign currency losses incurred in the prior year quarter.

Income ~~From~~(Loss) from Continuing Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Income (loss) before income taxes and equity in net loss of our equity-method investees for the three months ended ~~March 31,~~September 30, 2020 was ~~$15.4~~income of $2.2 million compared to ~~$11.9~~a loss of $5.2 million in the prior year quarter. The increase was due to the items discussed above.

Provision (Benefit) for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax ~~benefit~~expense from continuing operations was ~~$10.2~~$13.0 million for the three months ended ~~March 31,~~September 30, 2020 compared to an income tax ~~expense~~benefit of ~~$2.9~~$0.5 million in the prior year quarter.

The effective income tax rate from continuing operations was an expense of 589.2% and a benefit of ~~66.7% and expense of 24.7%~~10.3% for the three months ended ~~March 31,~~September 30, 2020 and ~~March 31,~~September 30, 2019, respectively. The effective income tax rate from continuing operations for the period ended ~~March 31,~~September 30, 2020 was impacted by ~~provisions of~~various discrete items including the ~~CARES Act. For an additional discussion on the~~tax impact of the ~~CARES Act, see Note 11,~~ ~~Income Taxes~~,United Kingdom fruit business reserve, the enacted change in the ~~Notes~~United Kingdom's corporate income tax rate to 19% and a legal entity reorganization completed during the ~~Consolidated Financial Statements included in item 1 of this Form 10-Q. The~~quarter ended September 30, 2020. In addition, the effective income tax rates from continuing operations for ~~all periods~~the three months ended September 30, 2020 and 2019 were impacted by provisions in the Tax Cuts and Jobs Act, ~~(the "Tax Act"),~~ primarily related to Global Intangible Low Taxed Income and limitations on the deductibility of executive compensation. The effective income tax rates in each period were also impacted by the geographical mix of ~~earnings.~~earnings and state valuation allowance.

In August 2020, the Company received $25.0 million including $1.2 million of interest from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") refund claim filed in July 2020. The remaining receivable balance of $28.7 million is included in Prepaid expenses and other current assets as of September 30, 2020.

Our effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements.

Equity in Net Loss of Equity-Method Investees

Our equity in net loss from our equity-method investments for the three months ended ~~March 31,~~September 30, 2020 was ~~$0.6 million~~$19 thousand and ~~$0.2~~$0.3 million in the prior year quarter. See Note ~~14,~~13, Investments, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Net ~~Income~~Loss from Continuing Operations

Net ~~income~~loss from continuing operations for the three months ended ~~March 31,~~September 30, 2020 was ~~$25.0~~$10.8 million, or ~~$0.24~~$0.11 per diluted share, compared to ~~$8.8~~$5.0 million, or ~~$0.08~~$0.05 per diluted share, for the three months ended ~~March 31,~~September 30, 2019. The increase in net loss was attributable to the factors noted above.

Net Income (Loss) from Discontinued Operations, Net of Tax

Net income (loss) from discontinued operations, net of tax, for the three months ended September 30, 2020 was income of $11.3 million, or $0.11 per diluted share, compared to a loss of $102.1 million, or $0.98 per diluted share, in the three months ended September 30, 2019.

During the three months ended September 30, 2020, the Company recognized a $11.3 million adjustment to the Tilda business primarily related to the recognition of a deferred tax benefit. Net loss from discontinued operations, net of tax, for the three months ended ~~March 31, 2020 was $0.7~~September 30, 2019 included a reclassification of $95.1 million ~~or $0.01 per diluted share, compared to $74.6 million, or $0.72 per diluted share, in the three months ended March 31, 2019.~~

~~During the three months ended March 31, 2020, the Company recognized a $0.5 million adjustment~~of cumulative translation losses from accumulated other comprehensive loss to the ~~sale~~Company's results of the Tilda ~~entities relating to post-closing adjustments. Net loss~~business' discontinued operations. The income tax

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expense from discontinued operations ~~net~~ of ~~tax, for the three months ended March 31, 2019 included asset impairment charges of $51.3 million associated with our former Hain Pure Protein business.~~

~~The income tax benefit from discontinued operations was $1.6~~$15.3 million for the three months ended ~~March 31, 2020 associated with~~September 30, 2019 was impacted by $16.5 million of tax related to the tax gain on the sale of the Tilda and Hain Pure Protein entities and the tax effect of current period book losses. The income tax benefit from discontinued operations of $21.2 million for the three months ended March 31, 2019 includes the reversal of the $12.3 million deferred tax liability previously recorded related to Hain Pure Protein being classified as held for sale. In addition, the benefit is impacted by the tax effect of current period book losses as well as deferred tax benefit arising from asset impairment charges.entities.

See Note 5,4, Assets Held for Sale and Discontinued Operations, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further discussion.

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Net Income (Loss)

Net income for the three months ended ~~March 31,~~September 30, 2020 was ~~$24.3~~$0.5 million, or ~~$0.23~~$0.00 per diluted share, compared to a net loss of ~~$65.8~~$107.0 million, or ~~$0.63~~$1.03 per diluted share, in the prior year quarter. The ~~increase~~change from net loss to net income was attributable to the factors noted above.

Adjusted EBITDA

Our Adjusted EBITDA was ~~$60.7~~$54.9 million and ~~$49.1~~$32.1 million for the three months ended ~~March 31,~~September 30, 2020 and 2019, respectively, as a result of the factors discussed above and the adjustments described in the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures presented following the discussion of our results of operations.

Segment Results

The following table provides a summary of net sales and operating income ~~(loss)~~ by reportable segment for the three months ended ~~March 31,~~September 30, 2020 and 2019:


(dollars in thousands)	(dollars in thousands)	North America			International			Corporate and Other			Consolidated			(dollars in thousands)	North America			International			Corporate and Other			Consolidated
Net sales	Net sales													Net sales
Three months ended 3/31/20		$	320,440		$	232,857		$	—		$	553,297
Three months ended 3/31/19		314,321			232,936			—			547,257
Three months ended 9/30/20														Three months ended 9/30/20	$	280,668		$	217,959		$	—		$	498,627
Three months ended 9/30/19														Three months ended 9/30/19	271,701			210,375			—			482,076
$ change	$ change	$	6,119		$	(79)		n/a			$	6,040		$ change	$	8,967		$	7,584		n/a			$	16,551
% change	% change	1.9		%	—		%	n/a			1.1		%	% change	3.3		%	3.6		%	n/a			3.4		%

Operating income (loss)	Operating income (loss)													Operating income (loss)
Three months ended 3/31/20		$	28,873		$	18,660		$	(28,398)		$	19,135
Three months ended 3/31/19		21,358			19,883			(22,249)			18,992
Three months ended 9/30/20														Three months ended 9/30/20	$	33,256		$	(15,889)		$	(14,087)		$	3,280
Three months ended 9/30/19														Three months ended 9/30/19	15,132			9,107			(21,784)			2,455
$ change	$ change	$	7,515		$	(1,223)		$	(6,149)		$	143		$ change	$	18,124		$	(24,996)		$	7,697		$	825
% change	% change	35.2		%	(6.2)		%	(27.6)		%	0.8		%	% change	119.8		%	(274.5)		%	35.3		%	33.6		%

Operating income (loss) margin	Operating income (loss) margin													Operating income (loss) margin
Three months ended 3/31/20		9.0		%	8.0		%	n/a			3.5		%
Three months ended 3/31/19		6.8		%	8.5		%	n/a			3.5		%
Three months ended 9/30/20														Three months ended 9/30/20	11.8		%	(7.3)		%	n/a			0.7		%
Three months ended 9/30/19														Three months ended 9/30/19	5.6		%	4.3		%	n/a			0.5		%

North America

Our net sales in the North America reportable segment for the three months ended ~~March 31,~~September 30, 2020 were ~~$320.4~~$280.7 million, an increase of ~~$6.1~~$9.0 million, or ~~1.9%~~3.3%, from net sales of ~~$314.3~~$271.7 million in the prior year quarter. The increase in net sales was primarily driven by an increase in overall demand for our products as a result of ~~pantry loading in reaction to the COVID-19 pandemic,~~increased at-home food consumption, most notably in our snacks, tea and certain personal care product categories, partially offset by brand divestitures and the strategic decision to no longer support certain lower margin SKUs in order to reduce complexity and increase gross margins. Operating income in North America for the three months ended ~~March 31,~~September 30, 2020 was ~~$28.9~~$33.3 million, an increase of ~~$7.5~~$18.1 million from ~~$21.4~~$15.1 million in the prior year quarter. The increase was driven by a favorable product mix, lower selling expenses and ~~supply chain~~cost efficiencies ~~partially offset by long-lived asset impairment charges~~gained with the Company's productivity and ~~increased severance costs.~~transformation initiatives.

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International

Our net sales in the International reportable segment for the three months ended ~~March 31,~~September 30, 2020 were ~~$232.9~~$218.0 million, ~~essentially flat compared to~~an increase of $7.6 million, or 3.6%, from net sales of $210.4 million in the prior year quarter. On a constant currency basis, net sales ~~increased 2.2%~~decreased 1.1% from the prior year quarter primarily due to decline in the fruit business, partially offset by an increase in overall demand for our products ~~as a result of pantry loading in reaction to COVID-19 and~~including the growth in our plant based food and beverage ~~products, partially offset by reductions in certain fruit-based~~ products. Operating ~~income~~loss in our International reportable segment for the three months ended ~~March 31,~~September 30, 2020 was ~~$18.7~~$15.9 million, a decrease of ~~$1.2~~$25.0 million from ~~$19.9~~operating income of $9.1 million for the three months ended ~~March 31,~~September 30, 2019. The decrease was primarily associated with long-lived asset impairment charges relating to a $32.5 million reserve recorded on the United Kingdom's fruit business, partially offset by ~~supply chain efficiencies.~~

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the increase in net sales as discussed above.

Corporate and Other

Our Corporate and Other category consists of expenses related to the Company’s centralized administrative functions, which do not specifically relate to an operating segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to our entire enterprise as well as expenses for certain professional fees, facilities, and other items which benefit the Company as a whole. ~~Additionally, Productivity and transformation costs and tradename impairment charges of $5.6 million and $7.7 million, respectively, are included~~Our operating loss in Corporate and Other for the three months ended ~~March 31, 2020. Chief Executive Officer Succession Plan expense, net and Productivity~~September 30, 2020 was $14.1 million, a decrease in loss of $7.7 million, from $21.8 million. This change was primarily related to productivity and transformation costs ~~net of insurance proceeds~~ included ~~within~~in Corporate and Other, ~~expenses were $0.5 million and $7.6 million, respectively,~~which for the three months ended ~~March 31, 2019.~~

~~Refer to Note 17,~~ ~~Segment Information, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

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~~Comparison of Nine Months Ended March 31, 2020 to Nine Months Ended March 31, 2019~~

~~Consolidated Results~~

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the nine months ended March 31, 2020 and 2019 (amounts in thousands, other than percentages, which may not add due to rounding):

Nine Months Ended Change in
March 31, 2020 March 31, 2019 Dollars Percentage
Net sales $ 1,542,157 100.0% $ 1,599,301 100.0% $ (57,144) (3.6)%
Cost of sales 1,206,324 78.2% 1,295,834 81.0% (89,510) (6.9)%
Gross profit 335,833 21.8% 303,467 19.0% 32,366 10.7%
Selling, general and administrative expenses 245,205 15.9% 235,561 14.7% 9,644 4.1%
Amortization of acquired intangibles 9,446 0.6% 9,946 0.6% (500) (5.0)%
Productivity and transformation costs 37,949 2.5% 29,613 1.9% 8,336 28.1%
Chief Executive Officer Succession Plan expense, net — —% 30,156 1.9% (30,156) *
Proceeds from insurance claim (2,962) (0.2)% — —% (2,962) *
Accounting review and remediation costs, net of insurance proceeds — —% 4,334 0.3% (4,334) *
Long-lived asset and intangibles impairment 15,414 1.0% 23,709 1.5% (8,295) (35.0)%
Operating income (loss) 30,781 2.0% (29,852) (1.9)% 60,633 203.1%
Interest and other financing expense, net 15,068 1.0% 15,736 1.0% (668) (4.2)%
Other expense, net 2,312 0.1% 2,038 0.1% 274 13.4%
Income (loss) from continuing operations before income taxes and equity in net loss of equity-method investees 13,401 0.9% (47,626) (3.0)% 61,027 128.1%
Benefit for income taxes (9,753) (0.6)% (1,926) (0.1)% (7,827) (406.4)%
Equity in net loss of equity-method investees 1,219 —% 391 —% 828 211.8%
Net income (loss) from continuing operations $ 21,935 1.4% $ (46,091) (2.9)% $ 68,026 147.6%
Net loss from discontinued operations, net of tax (105,581) (6.8)% (123,672) (7.7)% 18,091 14.6%
Net loss $ (83,646) (5.4)% $ (169,763) (10.6)% $ 86,117 50.7%
Adjusted EBITDA $ 137,827 8.9% $ 115,719 7.2% $ 22,108 19.1%
Diluted net income (loss) per common share from continuing operations $ 0.21 $ (0.44) $ 0.65 147.7%
Diluted net loss per common share from discontinued operations (1.01) (1.19) 0.18 15.1%
Diluted net loss per common share $ (0.80) $ (1.63) $ 0.83 50.9%

* ~~Percentage is not meaningful~~

~~Net Sales~~

~~Net sales for the nine months ended March 31,~~September 30, 2020 were $1.54 billion, a decrease of $57.1 million, or 3.6%, from $1.60 billion for the nine months ended March 31, 2019. On a constant currency basis, net sales decreased approximately 2.4% from the prior year period. Net sales on a constant currency basis decreased in the North America reportable segment and were essentially flat in the International reportable segment. Further details of changes in net sales by segment are provided below.

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~~Gross Profit~~

Gross profit for the nine months ended March 31, 2020 was $335.8 million, an increase of $32.4 million, or 10.7%, as compared to the prior year period. Gross profit margin was 21.8% of net sales, compared to 19.0% in the prior year period. The increased profit margin was primarily driven by a favorable product mix and supply chain efficiencies primarily in the United States, partially offset by unfavorable foreign currency impacts of $3.7 million.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses were $245.2 million for the nine months ended March 31, 2020, an increase of $9.6 million, or 4.1%, from $235.6 million for the prior year period. The increase was due to increased marketing and advertising spend in the current year period and lower variable compensation costs in the prior year period, including stock-based compensation expense, primarily related to the reversal of previously accrued amounts under certain performance based incentive plans of which achievement was no longer probable. See Note 13, ~~Stock-based Compensation and Incentive Performance Plans~~, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further discussion. Selling, general and administrative expenses as a percentage of net sales was 15.9% in the nine months ended March 31, 2020 compared to 14.7% in the prior year period, reflecting an increase of 120 basis points primarily attributable to the aforementioned items.

~~Amortization of Acquired Intangibles~~

Amortization of acquired intangibles was $9.4 million for the nine months ended March 31, 2020, a decrease of $0.5 million from $9.9 million in the prior year period. The decrease was due to finite-lived intangibles from certain historical acquisitions becoming fully amortized in periods subsequent to March 31, 2019 and the impact of movements in foreign currency.

~~Productivity and Transformation Costs~~

Productivity and transformation costs were $37.9 million for the nine months ended March 31, 2020, an increase of $8.3 million from $29.6 million in the prior year period. The increase was primarily due to increased consulting fees incurred in connection with the Company’s ongoing transformation initiatives and increased severance costs for the nine months ended March 31, 2020 as compared to the prior year period.

~~Chief Executive Officer Succession Plan Expense, Net~~

Net costs and expenses associated with the Company’s former Chief Executive Officer Succession Plan were $30.2 million for the nine months ended March 31, 2019. There were no comparable expenses in the nine months ended March 31, 2020. See Note 3, ~~Former Chief Executive Officer Succession Plan,~~ ~~in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further discussion.~~

~~Proceeds from Insurance Claim~~

In July of 2019, the Company received $7.0 million as partial payment from an insurance claim relating to business disruption costs associated with a co-packer. Of this amount, $4.5 million was recognized in fiscal 2019 as it relates to reimbursement of costs already incurred, with the remaining $2.5 million recognized in the nine months ended March 31, 2020. The Company recorded an additional $0.4 million of proceeds during the nine months ended March 31, 2020.

~~Accounting Review and Remediation Costs, Net of Insurance Proceeds~~

Costs and expenses associated with the internal accounting review, remediation and other related matters were $4.3 million for the nine months ended March 31, 2019. No such costs were incurred in the nine months ended March 31, 2020.

~~Long-lived Asset and Intangibles Impairment~~

During the nine months ended March 31, 2020, the Company recorded a pre-tax impairment charge of $4.0 million related to certain tradenames within the Company's North America segment and $5.5 million related to certain tradenames within the Company's International segment. Additionally, during the nine months ended March 31, 2020, the Company recorded a $5.9 million non-cash impairment charge primarily related to a write-down of certain machinery and equipment in the United States and Europe used to manufacture certain slow moving or low margin SKUs. During the nine months ended March 31, 2019, the Company recorded a pre-tax impairment charge of $17.9 million related to certain tradenames ($15.1 million related to the

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~~North America segment and $2.8 million related to the International segment). See Note 9,~~ ~~Goodwill and Other Intangible Assets~~, in the Notes to Consolidated Financial Statements included in Item 1 of this Form 10-Q. Additionally, the Company recorded $5.3 million of non-cash impairment charges primarily related to the Company’s decision to consolidate manufacturing of certain fruit-based products in the United Kingdom.

~~Operating Income (Loss)~~

Operating income for the nine months ended March 31, 2020 was $30.8 million compared to an operating loss of $29.9 million in the prior year period. The increase in operating income resulted from the items described above.

~~Interest and Other Financing Expense, Net~~

Interest and other financing expense, net totaled $15.1 million for the nine months ended March 31, 2020, a decrease of $0.7 million, or 4.2%, from $15.7 million in the prior year period. The decrease resulted primarily from lower interest expense related to our revolving credit facility as a result of lower outstanding debt and lower variable interest rates, offset in part by a $0.9 million write-off of deferred financing costs due to the repayment of the Company’s term loan. See Note 10, ~~Debt and Borrowings, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

~~Other Expense, Net~~

Other expense, net, totaled $2.3 million for the nine months ended March 31, 2020, compared to $2.0 million in the prior year period. The increase was primarily attributable to the loss on sale of the Arrowhead and SunSpire businesses during the second quarter, partially offset by higher net unrealized foreign currency gains principally due to the effect of foreign currency movements on the remeasurement of foreign currency denominated loans and the gain on sale of the Europe's Best business.

~~Income (Loss) From Continuing Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees~~

Income before income taxes and equity in net loss of our equity-method investees for the nine months ended March 31, 2020 was $13.4 million compared to a loss of $47.6 million in the prior year period. The increase was due to the items discussed above.

~~Income Taxes~~

The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax benefit from continuing operations was $9.8 million for the nine months ended March 31, 2020 compared to a benefit of $1.9 million in the prior year period.

The effective income tax rates from continuing operations was a benefit of 72.8% and a benefit of 4.0% for the nine months ended March 31, 2020 and March 31, 2019, respectively. The effective income tax rate from continuing operations for the period ended March 31, 2020 was impacted by provisions of the CARES Act. For an additional discussion on the impact of the CARES Act, see Note 11, ~~Income Taxes~~, in the Notes to the Consolidated Financial statements included in item 1 of this Form 10-Q. The effective income tax rates from continuing operations for all periods were impacted by provisions in the Tax Act primarily related to Global Intangible Low Taxed Income and limitations on the deductibility of executive compensation. The effective income tax rates in each period were also impacted by the geographical mix of earnings.

~~Equity in Net Loss of Equity-Method Investees~~

~~Our equity in net loss from our equity-method investments for the nine months ended March 31, 2020 was $1.2 million compared to $0.4 million in the prior year period. See Note 14,~~ ~~Investments, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

~~Net Income (Loss) from Continuing Operations~~

Net income from continuing operations for the nine months ended March 31, 2020 was $21.9 million compared to net loss of $46.1 million in the prior year period. Net income per diluted share from continuing operations was $0.21 for the nine months ended March 31, 2020 compared to net loss per diluted share of $0.44 in the prior year period. The increase was attributable to the factors noted above.

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~~Net Loss from Discontinued Operations, Net of Tax~~

Net loss from discontinued operations, net of tax, for the nine months ended March 31, 2020 was $105.6 million, or $1.01 per diluted share, compared to $123.7 million, or $1.19 per diluted share, in the prior year period.

Net loss from discontinued operations, net of tax, for the nine months ended March 31, 2020 included a reclassification of $95.1 million of cumulative translation losses from Accumulated comprehensive loss related to the Tilda business to discontinued operations. Net loss from discontinued operations, net of tax, for the nine months ended March 31, 2019 included asset impairment charges of $109.3 million associated with our former Hain Pure Protein business.

The income tax expense from discontinued operations was $11.8 million for the nine months ended March 31, 2020 and is impacted by $14.5 million of tax relating to the tax gain on the sale of the Tilda entities. The income tax benefit from discontinued operations of $48.8 million for the nine months ended March 31, 2019 includes the reversal of the $12.3 million deferred tax liability previously recorded related to Hain Pure Protein being classified as held for sale. In addition, the benefit is impacted by the tax effect of current period book losses as well as deferred tax benefit arising from asset impairment charges.

~~See Note 5,~~ ~~Discontinued Operations, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further discussion.~~

~~Net Loss~~

Net loss for the nine months ended March 31, 2020 was $83.6 million, or $0.80 per diluted share, compared to $169.8 million, or $1.63 per diluted share, in the prior year period. The decrease in net loss was attributable to the factors noted above.

~~Adjusted EBITDA~~

Our Adjusted EBITDA was $137.8 million and $115.7 million for the nine months ended March 31, 2020 and 2019, respectively, as a result of the factors discussed above and the adjustments described in the ~~Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures~~ ~~presented following the discussion of our results of operations.~~

~~Segment Results~~

~~The following table provides a summary of net sales and operating income (loss) by reportable segment for the nine months ended March 31, 2020 and 2019:~~

(dollars in thousands) North America International Corporate and Other Consolidated
Net sales
Nine months ended 3/31/20 $ 872,834 $ 669,323 $ — $ 1,542,157
Nine months ended 3/31/19 911,086 688,215 — 1,599,301
$ change $ (38,252) $ (18,892) n/a $ (57,144)
% change (4.2) % (2.7) % n/a (3.6) %
Operating income (loss)
Nine months ended 3/31/20 $ 64,067 $ 40,666 $ (73,952) $ 30,781
Nine months ended 3/31/19 35,427 40,696 (105,975) (29,852)
$ change $ 28,640 $ (30) $ 32,023 $ 60,633
% change 80.8 % (0.1) % 30.2 % 203.1 %
Operating income (loss) margin
Nine months ended 3/31/20 7.3 % 6.1 % n/a 2.0 %
Nine months ended 3/31/19 3.9 % 5.9 % n/a (1.9) %

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~~North America~~

~~Our net sales in the North America reportable segment for the nine months ended March 31, 2020 were $872.8~~$0.8 million, a decrease of ~~$38.3~~$9.9 million, ~~or 4.2%,~~ from ~~$911.1~~$10.7 million in the prior year period. The decrease in net sales was primarily driven by the strategic decision to no longer support certain lower margin SKUs in order to reduce complexity and increase gross margins, partially offset by increased overall demand for our products as a result of pantry loading in reaction to the COVID-19 pandemic during the third quarter of 2020. Operating income in North America for the ~~nine~~three months ended ~~March 31, 2020~~September 30, 2019. Additionally, our improvement to operating loss was $64.1 million, an increase of $28.6 million from $35.4 million in the prior year period. The increase in operating income was the result of increased gross profit in the United States driven by a favorable product mix, efficient trade spending and supply chain cost reductions in the United States as well as other productivity savings, offset in part by increased marketing and advertising expense and variable compensation.

~~International~~

Our net sales in the International reportable segment for the nine months ended March 31, 2020 were $669.3 million, a decrease of $18.9 million, or 2.7%, from $688.2 million in the prior year period. On a constant currency basis, net sales decreased 0.1% from the prior year primarily due to discontinued sales of unprofitable SKUs, partially offset by growth in our plant based food and beverage products. Operating income in our International reportable segment for the nine months ended March 31, 2020 was $40.7 million, essentially flat when compared to the prior year period. Excluding the impact of foreign currency movements of $1.1 million, operating income increased 2.9% for the nine months ended March 31, 2020, compared to the prior year period, due to increased gross profit driven by a favorable product mix and pantry loading in reaction to COVID-19 in Europe, partially offset by reductions in certain fruit-based products.

~~Corporate and Other~~

Our Corporate and Other category consists of expenses related to the Company’s centralized administrative functions, which do not specifically relate to an operating segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to our entire enterprise as well as expenses for certain professional fees, facilities, and other items which benefit the Company as a whole. Additionally, Productivity and transformation costs, tradename impairment charges, and proceeds from insurance claim included within Corporate and Other expenses ~~were $26.1~~that was a benefit of $2.6 million ~~$9.5 million, and $3.0 million, respectively, for~~in the ~~nine~~three months ended March 31, 2020. Chief Executive Officer Succession Plan expense, net, Productivity and transformation costs and Accounting review and remediation costs, net of insurance proceeds included within Corporate and Other expenses were $30.2 million, $21.0 million and $4.3 million, respectively, forSeptember 30, 2019, with no corresponding benefit in the ~~nine months ended March 31, 2019.~~current quarter.

Refer to Note ~~17,~~18, Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Liquidity and Capital Resources

We finance our operations and growth primarily with the cash flows we generate from our operations and from borrowings available to us under our ~~Third~~ Amended ~~and Restated~~ Credit ~~Agreement (as amended, the “Amended Credit Agreement”).~~Agreement. As of ~~March 31,~~September 30, 2020, ~~$628.1~~$702.3 million was available under the Amended Credit Agreement, and the Company was in compliance with all associated covenants. We believe that our cash flows from operations and borrowing capacity under our Amended Credit Agreement will be adequate to meet anticipated operating and other expenditures for the foreseeable future.

Our cash and cash equivalents balance, ~~increased $10.5~~including those balances classified as held for sale, decreased $0.5 million at ~~March 31,~~September 30, 2020 to ~~$41.5~~$37.3 million as compared to ~~$31.0~~$37.8 million at June 30, ~~2019.~~2020. Our working capital from continuing operations was ~~$301.8~~$283.7 million at ~~March 31,~~September 30, 2020, an increase of ~~$61.5~~$23.1 million from ~~$240.3~~$260.7 million at the end of fiscal ~~2019.~~2020.

Liquidity is affected by many factors, some of which are based on normal ongoing operations of the Company’s business and some of which arise from fluctuations related to global economics and markets. Our cash balances are held in the United States, United Kingdom, Canada, Europe and India. As of ~~March 31,~~September 30, 2020, substantially all of the total cash balance from continuing operations was held outside of the United States due to debt repayments made towards our revolving credit facility at the end of the period by the United States operating segment. It is our current intent to indefinitely reinvest our remaining foreign earnings outside the United States. However, we intend to further study changes enacted by the Tax Act, costs of repatriation and the current and future cash needs of foreign operations to determine whether there is an opportunity to repatriate foreign cash balances in the future on a tax-efficient basis.

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We maintain our cash and cash equivalents primarily in money market funds or their equivalent. As of ~~March 31,~~September 30, 2020, all of our investments were expected to mature in less than three months. Accordingly, we do not believe that our investments have significant exposure to interest rate risk. Cash provided by (used in) operating, investing and financing activities is summarized below.

Nine Months Ended March 31, Change in
(amounts in thousands) 2020 2019 Dollars Percentage
Cash flows provided by (used in):
Operating activities from continuing operations $ 64,092 $ 18,331 $ 45,761 249.6%
Investing activities from continuing operations (32,533) (51,210) 18,677 36.5%
Financing activities from continuing operations (18,917) 3,384 (22,301) (659.0)%
Effect of exchange rate changes on cash from continuing operations (2,110) (774) (1,336) (172.6)%
Increase (decrease) in cash from continuing operations 10,532 (30,269) 40,801 134.8%
Decrease in cash from discontinued operations (8,509) (17,057) 8,548 50.1%
Net increase (decrease) in cash and cash equivalents and restricted cash $ 2,023 $ (47,326) $ 49,349 104.3%


	Three Months Ended September 30,				Change in
(amounts in thousands)	2020		2019		Dollars
Cash flows provided by (used in):
Operating activities from continuing operations	$	40,669	$	(3,581)	$	44,250
Investing activities from continuing operations	(7,728)		(13,164)		5,436
Financing activities from continuing operations	(35,959)		7,142		(43,101)
Effect of exchange rate changes on cash from continuing operations	2,500		(892)		3,392
Decrease in cash from continuing operations	(518)		(10,495)		9,977
Decrease in cash from discontinued operations	—		(8,509)		8,509
Net decrease in cash and cash equivalents	$	(518)	$	(19,004)	$	18,486

Cash provided by operating activities from continuing operations was ~~$64.1~~$40.7 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2020, an increase of ~~$45.8~~$44.3 million from cash used in operating activities from continuing operations of $3.6 million in the prior year period. This increase resulted primarily from an improvement of ~~$51.1~~$27.9 million in net income adjusted for non-cash charges in the current period and ~~a decrease~~greater cash generation of ~~$5.4~~$16.4 million ~~of cash used in~~from our working capital accounts.

Cash used in investing activities from continuing operations was ~~$32.5~~$7.7 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2020, a decrease of ~~$18.7~~$5.4 million from ~~$51.2~~$13.2 million in the prior year period primarily due to proceeds from sale of ~~$15.1 million from brand divestitures~~businesses and decreased capital expenditures.

Cash used in financing activities from continuing operations was ~~$18.9~~$36.0 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2020, a decrease of ~~$22.3~~$43.1 million ~~from~~compared to $7.1 million of cash provided ~~by of $3.4 million~~ in the prior year period. Cash used in financing activities from continuing operations for the ~~nine~~three months ended ~~March 31,~~September 30, 2020 included $8.0 million of net borrowings of our revolving credit facility and $42.1 million of share repurchases. Cash provided by financing activities from continuing operations for the three months ended September 30, 2019 included ~~$263.8~~$312.2 million primarily related to the proceeds from the sale of Tilda, partially offset by $304.7 million of net repayments of our term loan and revolving credit facility funded primarily through proceeds received from the sale of Tilda and $57.4 million of share repurchases, offset in part by $305.2 million primarily related to the proceeds from the sale of Tilda.facility.

Operating Free Cash Flow from Continuing Operations

Our operating free cash flow from continuing operations was ~~$17.1~~$28.5 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2020, an improvement of ~~$53.9~~$45.3 million from negative ~~$36.7~~$16.7 million in the ~~nine~~three months ended ~~March 31,~~September 30, 2019. This improvement resulted primarily from an improvement of ~~$51.1~~$27.9 million in net income adjusted for non-cash charges ~~a decrease~~in the current period and greater cash generation of ~~$5.4~~$16.4 million ~~of cash used in~~from our working capital ~~accounts and a decrease of $8.1 million in capital expenditures.~~accounts. See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities from continuing operations to operating free cash flow from continuing operations.

Share Repurchase Program

On June 21, 2017, the Company’s Board of Directors authorized the repurchase of up to $250 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020, the Company repurchased ~~2,439~~1,281 shares under the program for a total of ~~$57.4~~$42.0 million, excluding commissions, at an average price of ~~$23.52~~$32.81 per share. As of ~~March 31,~~September 30, 2020, the Company had ~~$192.6~~$147.8 million of remaining authorization under the share repurchase program.

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Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures

We have included in this report measures of financial performance that are not defined by U.S. GAAP. We believe that these measures provide useful information to investors and include these measures in other communications to investors.

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For each of these non-U.S. GAAP financial measures, we are providing below a reconciliation of the differences between the non-U.S. GAAP measure and the most directly comparable U.S. GAAP measure, an explanation of why our management and Board of Directors believe the non-U.S. GAAP measure provides useful information to investors and any additional purposes for which our management and Board of Directors use the non-U.S. GAAP measures. These non-U.S. GAAP measures should be viewed in addition to, and not in lieu of, the comparable U.S. GAAP measures.

Constant Currency Presentation

We believe that this measure provides useful information to investors because it provides transparency to underlying performance in our consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

A reconciliation between reported and constant currency net sales increase (decrease) is as follows:

(amounts in thousands) North America International Hain Consolidated
Net sales - Three months ended 3/31/20 $ 320,440 $ 232,857 $ 553,297
Impact of foreign currency exchange 477 5,095 5,572
Net sales on a constant currency basis - Three months ended 3/31/20 $ 320,917 $ 237,952 $ 558,869
Net sales - Three months ended 3/31/19 $ 314,321 $ 232,936 $ 547,257
Net sales growth on a constant currency basis 2.1 % 2.2 % 2.1 %
Net sales - Nine months ended 3/31/20 $ 872,834 $ 669,323 $ 1,542,157
Impact of foreign currency exchange 764 18,515 19,279
Net sales on a constant currency basis - Nine months ended 3/31/20 $ 873,598 $ 687,838 $ 1,561,436
Net sales - Nine months ended 3/31/19 $ 911,086 $ 688,215 $ 1,599,301
Net sales decline on a constant currency basis (4.1) % (0.1) % (2.4) %


(amounts in thousands)	North America			International			Hain Consolidated
Net sales - Three months ended 9/30/20	$	280,668		$	217,959		$	498,627
Impact of foreign currency exchange	363			(9,886)			(9,523)
Net sales on a constant currency basis - Three months ended 9/30/20	$	281,031		$	208,073		$	489,104

Net sales - Three months ended 9/30/19	$	271,701		$	210,375		$	482,076
Net sales growth on a constant currency basis	3.4		%	(1.1)		%	1.5		%

Adjusted EBITDA

Adjusted EBITDA is defined as net income (loss) before income taxes, net interest expense, depreciation and amortization, impairment of long-lived ~~and intangible~~ assets, equity in net loss of equity-method investees, stock-based compensation, net, ~~stock-based compensation in connection with the Company's former CEO Succession Plan,~~ productivity and transformation costs, SKU rationalization and certain inventory ~~writedowns,~~write-downs, unrealized currency gains and losses and other adjustments. The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation. Adjusted EBITDA is a non-U.S. GAAP measure and may not be comparable to similarly titled measures reported by other companies.

We do not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP. The principal limitation of Adjusted EBITDA is that it excludes certain expenses and income that are required by U.S. GAAP to be recorded in our consolidated financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as this metric reflects the exercise of judgment by management about which expenses and income are excluded or included in determining Adjusted EBITDA. In order to compensate for these limitations, management presents Adjusted EBITDA in connection with U.S. GAAP results.

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A reconciliation of net income (loss) to Adjusted EBITDA is as follows:


		Three Months Ended March 31,						Nine Months Ended March 31,							Three Months Ended September 30,
(amounts in thousands)	(amounts in thousands)	2020		2019		2020		2019		(amounts in thousands)	2020		2019
Net income (loss)	Net income (loss)	$	24,339	$	(65,837)	$	(83,646)	$	(169,763)	Net income (loss)	$	485	$	(107,021)
Net loss from discontinued operations		(697)		(74,620)		(105,581)		(123,672)
Net income (loss) from continuing operations		25,036		8,783		21,935		(46,091)
Net income (loss) from discontinued operations										Net income (loss) from discontinued operations	11,266		(102,068)
Net loss from continuing operations										Net loss from continuing operations	(10,781)		(4,953)

(Benefit) provision for income taxes		(10,242)		2,943		(9,753)		(1,926)
Provision (benefit) for income taxes										Provision (benefit) for income taxes	12,962		(531)
Interest expense, net	Interest expense, net	3,332		5,278		11,884		13,966		Interest expense, net	2,154		4,552
Depreciation and amortization	Depreciation and amortization	12,927		12,483		40,069		37,548		Depreciation and amortization	13,761		13,923
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	564		205		1,219		391		Equity in net loss of equity-method investees	19		317
Stock-based compensation, net	Stock-based compensation, net	3,761		3,927		9,581		5,489		Stock-based compensation, net	4,367		2,737
Stock-based compensation expense in connection with Chief Executive Officer Succession Agreement		—		—		—		429

Long-lived asset and intangibles impairment		13,525		—		15,414		23,709

Long-lived asset impairment										Long-lived asset impairment	32,497		—
Unrealized currency (gains) losses	Unrealized currency (gains) losses	(1,011)		1,522		188		2,551		Unrealized currency (gains) losses	(1,202)		1,684
Productivity and transformation costs	Productivity and transformation costs	10,967		9,259		37,402		29,464		Productivity and transformation costs	1,150		14,175
Chief Executive Officer Succession Plan expense, net		—		455		—		29,727

Proceeds from insurance claim	Proceeds from insurance claim	(400)		—		(2,962)		—		Proceeds from insurance claim	—		(2,562)
Accounting review and remediation costs, net of insurance proceeds		—		—		—		4,334
Warehouse/manufacturing facility start-up costs		537		3,222		3,055		9,529
Loss on sale of business		332		—		2,115		—
SKU rationalization and inventory writedown		1,362		505		5,278		2,035

Warehouse/manufacturing consolidation and other costs										Warehouse/manufacturing consolidation and other costs	390		1,879
Gain on sale of businesses										Gain on sale of businesses	(620)		—
SKU rationalization and inventory write-down										SKU rationalization and inventory write-down	204		(11)
Plant closure related costs	Plant closure related costs	—		184		2,354		3,502		Plant closure related costs	(6)		832
Litigation and related expenses	Litigation and related expenses	—		371		48		1,062		Litigation and related expenses	—		48
Adjusted EBITDA	Adjusted EBITDA	$	60,690	$	49,137	$	137,827	$	115,719	Adjusted EBITDA	$	54,895	$	32,090

Operating Free Cash Flow from Continuing Operations

In our internal evaluations, we use the non-U.S. GAAP financial measure “Operating Free Cash Flow from continuing operations.” The difference between operating free cash flow from continuing operations and cash flow provided by or used in operating activities from continuing operations, which is the most comparable U.S. GAAP financial measure, is that Operating Free Cash Flow from continuing operations reflects the impact of ~~capital expenditures.~~purchases of property, plant and equipment (capital spending). Since capital spending is essential to maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider capital spending when evaluating our cash provided by or used in operating activities. We view Operating Free Cash Flow from continuing operations as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments. We do not consider Operating Free Cash Flow from continuing operations in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP.

A reconciliation from Cash flow provided by operating activities from continuing operations to Operating Free Cash flow from continuing operations is as follows:


		Nine Months Ended March 31,							Three Months Ended September 30,
(amounts in thousands)	(amounts in thousands)	2020		2019		(amounts in thousands)	2020		2019
Cash flow provided by operating activities - continuing operations		$	64,092	$	18,331
Cash flow provided by (used in) operating activities from continuing operations						Cash flow provided by (used in) operating activities from continuing operations	$	40,669	$	(3,581)
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(46,961)		(55,073)		Purchases of property, plant and equipment	(12,155)		(13,164)
Operating Free Cash Flow - continuing operations		$	17,131	$	(36,742)
Operating Free Cash Flow from continuing operations						Operating Free Cash Flow from continuing operations	$	28,514	$	(16,745)

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Off Balance Sheet Arrangements

At ~~March 31,~~September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had, or are likely to have, a material current or future effect on our consolidated financial statements.

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Critical Accounting Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. We believe in the quality and reasonableness of our critical accounting policies; however, materially different amounts may be reported under different conditions or using assumptions different from those that we have applied. The accounting policies that have been identified as critical to our business operations and to understanding the results of our operations pertain to revenue recognition, trade promotions and sales incentives, valuation of accounts and ~~chargebacks~~chargeback receivable, ~~accounting for acquisitions,~~ valuation of long-lived assets, goodwill and intangible assets, stock-based compensation and valuation allowances for deferred tax assets. The application of each of these critical accounting policies and estimates is discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019.~~2020.

Recent Accounting Pronouncements

Refer to Note 2, Basis of Presentation, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Seasonality

Certain of our product lines have seasonal fluctuations. Hot tea, ~~baking products, hot cereal,~~ hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our prepared food and personal care products are stronger in the warmer months. As such, our results of operations and our cash flows for any particular quarter are not indicative of the results we expect for the full year, and our historical seasonality may not be indicative of future quarterly results of operations. In recent years, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in market risk from those addressed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019~~2020 during the three ~~and nine~~ months ended ~~March 31, 2020, other than the risk associated with COVID-19 described in Part II, Item 1A,~~ ~~Risk Factors~~ ~~of this Form 10-Q.~~September 30, 2020. See the information set forth in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019.~~2020.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Our disclosure controls and procedures are intended to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on this review, our CEO and CFO have concluded that the disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2020.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the three months ended ~~March 31,~~September 30, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~Securities Class Actions Filed in Federal Court~~

~~On August~~The information called for by this item is incorporated herein by reference to Note 17, ~~2016, three securities class action complaints were filed~~Commitments and Contingencies, in the ~~Eastern District of New York against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The three complaints are: (1)~~ ~~Flora v. The Hain Celestial Group, Inc., et al.~~ ~~(the “Flora Complaint”); (2)~~ ~~Lynn v. The Hain Celestial Group, Inc., et al.~~ ~~(the “Lynn Complaint”); and (3)~~ ~~Spadola v. The Hain Celestial Group, Inc., et al.~~ (the “Spadola Complaint” and, together with the Flora and Lynn Complaints, the “Securities Complaints”). On June 5, 2017, the court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel. PursuantNotes to ~~this order, the Securities Complaints were consolidated under the caption~~ ~~In re The Hain Celestial Group, Inc. Securities Litigation~~ (the “Consolidated Securities Action”), and Rosewood Funeral Home and Salamon Gimpel were appointed as Co-Lead Plaintiffs. On June 21, 2017, the Company received notice that plaintiff Spadola voluntarily dismissed his claims without prejudice to his ability to participate in the Consolidated ~~Securities Action as an absent class member. The Co-Lead Plaintiffs~~Financial Statements included in ~~the Consolidated Securities Action filed a Consolidated Amended Complaint on August 4, 2017 and a Corrected Consolidated Amended Complaint on September 7, 2017 on behalf~~Part I, Item 1 of a purported class consisting of all persons who purchased or otherwise acquired Hain Celestial securities between November 5, 2013 and February 10, 2017 (the “Amended Complaint”). The Amended Complaint named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead. Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its current and former officers and asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Amended Complaint, including materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. Co-Lead Plaintiffs filed an opposition on August 5, 2019, and Defendants submitted a reply on September 3, 2019. On April 6, 2020, the Court granted Defendants' motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs filed a notice of appeal on May 5, 2020 indicating their intent to appeal the Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit.this Form 10-Q.

~~Stockholder Derivative Complaints Filed in State Court~~

~~On September 16, 2016, a stockholder derivative complaint,~~ ~~Paperny v. Heyer, et al.~~ (the “Paperny Complaint”), was filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers of the Company alleging breach of fiduciary duty, unjust enrichment, lack of oversight and corporate waste. On December 2, 2016 and December 29, 2016, two additional stockholder derivative complaints were filed in New York State Supreme Court in Nassau County against the former Board of Directors and certain former officers under the captions ~~Scarola v. Simon~~ ~~(the “Scarola Complaint”) and~~ ~~Shakir v. Simon~~ (the “Shakir Complaint” and, together with the Paperny Complaint and the Scarola Complaint, the “Derivative Complaints”), respectively. Both the Scarola Complaint and the Shakir Complaint alleged breach of fiduciary duty, lack of oversight and unjust enrichment. On February 16, 2017, the parties for the Derivative Complaints entered into a stipulation consolidating the matters under the caption ~~In re The Hain Celestial Group~~ (the “Consolidated Derivative Action”) in New York State Supreme Court in Nassau County, ordering the Shakir Complaint as the operative complaint. On November 2, 2017, the parties agreed to stay the Consolidated Derivative Action. Co-Lead Plaintiffs requested leave to file an amended consolidated complaint, and on January 14, 2019, the Court partially lifted the stay, ordering Co-Lead Plaintiffs to file their amended complaint by March 7, 2019. Co-Lead Plaintiffs filed a Verified Amended Shareholder Derivative Complaint on March 7, 2019. The Court continued the stay pending a decision on Defendants’ motion to dismiss in the Consolidated Securities Action (referenced above). After the Court in the Consolidated Securities Action dismissed the Amended Complaint, the Court in the Consolidated Derivative Action ordered Co-Lead Plaintiffs to file a second amended complaint no later than July 8, 2019. Co-Lead Plaintiffs filed a Verified Second Amended Shareholder Derivative Complaint on July 8, 2019 (the “Second Amended Derivative Complaint”). Defendants moved to dismiss the Second Amended Derivative Complaint on August 7, 2019. Co-Lead Plaintiffs filed an opposition to Defendants’ motion to dismiss, and Defendants submitted a reply on September 20, 2019. This motion is fully briefed, and the parties await a decision.

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~~Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court~~

On April 19, 2017 and April 26, 2017, two class action and stockholder derivative complaints were filed in the Eastern District of New York against the former Board of Directors and certain former officers of the Company under the captions ~~Silva v. Simon, et al.~~ ~~(the “Silva Complaint”) and~~ ~~Barnes v. Simon, et al.~~ (the “Barnes Complaint”), respectively. Both the Silva Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment.

~~On August 10, 2017, the court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption~~ ~~In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation~~ (the “Consolidated Stockholder Class and Derivative Action”) and to appoint Robbins Arroyo LLP and Scott+Scott as Co-Lead Counsel, with the Law Offices of Thomas G. Amon as Liaison Counsel for Plaintiffs. On September 14, 2017, a related complaint was filed under the caption ~~Oliver v. Berke, et al.~~ (the “Oliver Complaint”), and on October 6, 2017, the Oliver Complaint was consolidated with the Consolidated Stockholder Class and Derivative Action. The Plaintiffs filed their consolidated amended complaint under seal on October 26, 2017. On December 20, 2017, the parties agreed to stay Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through and including 30 days after a decision was rendered on the motion to dismiss the Amended Complaint in the Consolidated Securities Action, described above.

On April 6, 2020, the Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice. Pursuant to the terms of the stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. On April 28, 2020, the Court entered an order extending Defendants’ time to respond to June 9, 2020.

~~Other~~

Item 1A. Risk Factors

~~The below risk factor relating to~~There have been no material changes from the ~~COVID-19 pandemic updates and supplements~~discussion of the ~~risk~~material factors ~~disclosed~~that make an investment in ~~Part I, “Item 1A. Risk Factors”~~the Company speculative or risky contained in ~~our~~the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019,~~2020, filed with the SEC on August ~~29, 2019.~~25, 2020.

The COVID-19 pandemic creates near-term and longer-term challenges and uncertainty, and our business and operating results may be adversely affected if we do not manage our business effectively in response.

The COVID-19 pandemic and the measures being taken by governments, businesses and consumers to limit the spread of COVID-19 have led to significant operational challenges in our business and will result in broader and longer-term challenges and uncertainty that we will need to successfully manage, including but not limited to:

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•~~Manufacturing and Supply Chain Challenges~~ – We are facing, and will continue to face, significant operational challenges in manufacturing our products and making them available to customers and consumers as a result of the COVID-19 pandemic. The implementation of extra employee and consumer health and safety precautions has led to temporary disruptions at certain of our manufacturing facilities, and could lead to more prolonged disruptions or closures in the future. Additionally, shelter-in-place and social distancing behaviors, which are being mandated or encouraged by governments and practiced by businesses and individuals, create challenges for our workforce and our business. All of these health and safety precautions and individual shelter-in-place and social distancing behaviors also impact third parties on which we rely to make our products available to consumers, including our suppliers, contract manufacturers, distributors, logistics providers and other business partners, as well as the retailers that ultimately sell our products to consumers.

•~~Uncertain Future Consumer Demand Environment~~ – While we have experienced a net increase in the overall demand for our products during the early phases of the COVID-19 pandemic, deteriorating economic and political conditions arising from the COVID-19 pandemic could adversely affect future demand for our products. Factors such as increased unemployment, decreases in disposable income and declines in consumer confidence could cause a decrease in demand for our overall product set, particularly higher priced products. Additionally, demand for certain of our product offerings, such as sun care products and the food service component of our European fruit business, has been adversely impacted by the COVID-19 pandemic and may continue to be adversely impacted due to changed consumer behavior and priorities.

•~~Increased Costs~~ – We have incurred, and expect to continue to incur, additional costs to address the challenges created by the COVID-19 pandemic. These include additional costs associated with overtime pay, appropriately compensating employees for working under challenging conditions, hiring temporary contractors, temporary factory closures, implementing increased safety measures, and procuring ingredients and managing our supply chain during a global pandemic. Our operating results may be adversely affected if we fail to adequately manage these costs or if we experience significant unexpected costs in the future.

•~~Changed Business Environment and Priorities~~ – The COVID-19 pandemic has resulted in dramatic changes to the environment in which we operate, and some aspects of the changed environment may continue into the foreseeable future. Additionally, with much of our focus centered on managing our business through the COVID-19 pandemic, we have made the decision to delay some important initiatives. These changes to the overall business environment include:

◦~~Productivity challenges as many of our employees work from home and all of our employees face risks and uncertainty while working during a global public health crisis;~~

◦~~Changes in the way our customers communicate with us and in customer priorities, as customers cancel in-person sales meetings and postpone product reset decisions;~~

◦~~Shifts in consumer shopping trends with an increased importance of e-commerce channels;~~

◦~~Cancellation of important internal and external conferences including our internal global sales conference and industry and customer trade shows;~~

◦~~Delays and uncertainty in obtaining product certifications and undergoing quality audits; and~~

◦~~Our decision to delay planned innovation and productivity initiatives.~~

•~~Financial Impact on Third Parties and Equity Investments~~ – The economic fallout from the COVID-19 pandemic will impact third parties with which we conduct business, including our suppliers, contract manufacturers, distributors, logistics providers and other business partners. Deteriorating economic conditions could jeopardize the viability of some third parties and our business relationships with them and could cause us to incur losses or increased costs in our dealings with those third parties. Additionally, we have equity investments in businesses and joint ventures that have been materially impacted by the COVID-19 pandemic, and the value of those equity investments could become impaired or lost if those businesses are unable to stabilize their operations.

The ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control. If we are unable to successfully manage our business through the challenges and uncertainty created by the COVID-19 pandemic, our business and operating results could be materially adversely affected.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The table below sets forth information regarding repurchases by the Company of its common stock during the periods indicated.

Period (a)
Total number
of shares
purchased (1)
(b)
Average
price paid
per share
(c)
Total number of
shares purchased
as part of
publicly
announced plans
(d)
Maximum
number of shares
that may yet be
purchased under
the plans (in millions of dollars) (2)
January 1, 2020 - January 31, 2020 14,519 $ 24.96 — $ 250.0
February 1, 2020 - February 29, 2020 5,057 26.02 — $ 250.0
March 1, 2020 - March 31, 2020 2,439,677 23.52 2,438,518 $ 192.6
Total 2,459,253 $ 23.54


Period	(a) Total number of shares purchased (1)	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans	(d) Maximum number of shares that may yet be purchased under the plans (in millions of dollars) (2)
July 1, 2020 - July 31, 2020	12,517	$	31.47	—	$	189.8
August 1, 2020 - August 31, 2020	328,275	32.50		320,600	$	179.4
September 1, 2020 - September 30, 2020	960,407	32.92		960,407	$	147.8
Total	1,301,199	$	32.80	1,281,007

(1) Includes shares surrendered for payment of employee payroll taxes due on shares issued under stock-based compensation plans and shares repurchased under share repurchase programs approved by the Board of Directors. See (2) below for further details.

(2) On June 21, 2017, the Company’s Board of Directors authorized the repurchase of up to $250 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to preset trading plans, in private transactions or otherwise. The authorization does not have a stated expiration date. During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020, the Company repurchased ~~2,439~~1,281 shares pursuant to the repurchase program for a total of ~~$57.4~~$42.0 million, excluding commissions, at an average price of ~~$23.52~~$32.81 per share. As of ~~March 31,~~September 30, 2020, the Company had ~~$192.6~~$147.8 million of remaining authorization under the share repurchase program.

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Item 6. Exhibits


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of Amendment No. 1 to the Company’s Registration Statement on Form S-4 filed with the SEC on April 24, 2000).

3.2						Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2(b) of the Company’s Current Report on Form 8-K filed with the SEC on November 26, 2014).

3.3						Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 7, 2018).

4.1						Specimen of common stock certificate (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Company’s Registration Statement on Form S-4 filed with the SEC on April 24, 2000).

~~10.1~~						~~Form of Indemnification Agreement.~~

~~10.2~~						~~Separation Agreement, dated as of February 7, 2020, between the Company and Kevin McGahren.~~

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

32.1						Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE HAIN CELESTIAL GROUP, INC.
		(Registrant)

Date:	~~May 7,~~November 9, 2020	/s/ Mark L. Schiller
		Mark L. Schiller, President and Chief Executive Officer


Date:	~~May 7,~~November 9, 2020	/s/ Javier H. Idrovo
		Javier H. Idrovo, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

5451


	Number of Options	Weighted Average Exercise Price		Weighted Average Contractual Life (years)	Aggregate Intrinsic Value
Options outstanding and exercisable at June 30, 2019	122	$	2.26
Exercised	—	—
Options outstanding and exercisable at March 31, 2020	122	$	2.26	11.3	$	2,891